Here’s what’s happening with stagflation risks around the world as the conflict with Iran drags on — and why people are getting more nervous about the economy.

First off, the energy shock has hit hard. The fighting between Iran, the U.S., and Israel has seriously disrupted the Strait of Hormuz — that’s the main artery for about a fifth of the world’s oil. Oil prices are jumping, making everything more expensive everywhere. Some analysts say this could actually end up worse than the energy crisis in the 1970s. If the Strait stays blocked, oil could spike to $150 or even $200 a barrel.

So why does this set the stage for stagflation? When energy gets expensive, so does everything else — factories, trucks, shipping, you name it. Suddenly, everyone’s dealing with higher costs, and that ripple effect boosts inflation. But at the same time, those high costs slow the economy down. People and companies cut back. Central banks get stuck — do they raise interest rates to fight inflation and risk choking off growth? Or do they cut rates to help the economy, making inflation even worse?

There’s not much relief elsewhere. Forecasters like Deutsche Bank and Oxford Economics directly connect the fighting to rising chances of recession and stagflation. Business surveys show confidence is sinking in major economies. Even central banks that don’t usually move quickly — like the Bank of Japan — are talking about rate hikes because inflation just won’t let up, even as growth slows.

Financial markets see the danger too. Bond markets are taking a beating as investors brace for both stubborn inflation and interest rates staying high for longer. Big banks are downgrading growth forecasts and boosting inflation outlooks, so there’s really no escaping this stagflation story.

There’s more — the World Bank is worried about everything from rising prices to job losses to food shortages, all linked to the conflict’s shockwaves. Over 40 countries are urging Iran to reopen the Strait — it’s that critical for the global economy.

The short version? Stagflation — high inflation and stalled or negative growth — is moving from a hypothetical to a real risk. That’s because:

- Energy and oil costs keep rising due to war-related supply issues.

- Business confidence and growth are fading almost everywhere.

- Central banks have their hands tied; whatever they do carries real risks.

If the conflict keeps dragging on, economists say we could be in for a long spell where prices stay high but economies barely grow, or even shrink — the textbook definition of stagflation.

If you want details on how this is playing out in specific regions or how central banks are juggling their choices, just let me know.