The prolonged U.S.-Iran conflict has lifted fuel and material costs, contributing to faster inflation and weakening expectations for additional interest-rate cuts before year-end. That shift has intensified pressure on small businesses, pushing sentiment down to its lowest level since Donald Trump was elected to his second term. Although U.S. and Iranian officials announced a preliminary ceasefire deal on Sunday, the economic fallout is expected to persist.

Ukraine has recently used attack drones to systematically strike key highways, rail lines and bridges leading to Crimea, destroying large numbers of fuel tankers and freight trains. Videos circulating widely on social media show fuel trucks burning and long lines at gas stations, with one witness saying an overnight wait for gasoline lasted eight hours. The disruptions have caused acute gasoline shortages on the peninsula and hampered the summer tourism season. The campaign targets the physical energy logistics chain between Russia and Crimea, materially unsettling regional supply-and-demand for refined products, especially gasoline.

Mosaic, one of the world’s largest phosphate fertilizer makers, said disrupted sulfur shipments through the Strait of Hormuz have driven up a key input that now accounts for about half of its roughly $800-per-ton selling price. The company reported a net loss of $258 million for the quarter ending March 30 and said it will slow production at some plants. Even after the United States and Iran reached a preliminary ceasefire agreement on Sunday, shipping and supply chains could take months to normalize, with damaged infrastructure potentially not rebuilt until 2028, according to an agricultural economist at North Dakota State University.