The sprawling Middle East crisis is expected to spur drivers to abandon traditional internal combustion engine vehicles in favor of EVs, analysts told CNBC, although early evidence suggests this will be a gradual gearshift.

The Iran war has severely disrupted oil exports through the strategically vital Strait of Hormuz, which typically carries about a fifth of the world’s oil and liquified natural gas (LNG). It has underlined the extent to which the world remains deeply reliant on fragile fossil fuel trade routes, while surging oil and gas prices have jolted energy markets and triggered widespread inflation fears.

Various car-selling platforms in the U.S. and Europe have reported a sharp increase in consumer interest for EVs since the war began in late February. The burgeoning trend comes even as a large chunk of the legacy car industry pivots back to internal combustion engine (ICE) vehicles.

Autotrader, an online vehicles marketplace, reported on March 26 a 28% jump in inquiries about buying a new EV and a 15% increase in inquiries about buying a used one, since the war in Iran started on Feb. 28. EV specialist Octopus Electric Vehicles said on March 25 it had seen EV leasing inquiries rise 36% since the start of the conflict.

But U.S. automakers Ford Motor, General Motors and Jeep owner Stellantis have all reversed course on EV strategies, booking tens of billions of dollars in combined write-offs and restructuring costs, in part due to lackluster consumer demand and shifting political landscapes.

Steffen Michulski, senior consultant at JATO Dynamics, said that while the situation is still evolving, it was already clear that the fallout from the Iran war could influence EV demand.

Owning a battery electric vehicle (BEV) has become more compelling for drivers covering a lot of mileage, Michulski said, given that a sharp rise in oil prices has made conventional gasoline cars much more expensive.

Switching to an EV may also provide households with an extra layer of energy independence, Michulski said, although he cautioned that it would be important not to “oversimplify” the situation. He pointed out that the overall economic environment may soften if inflation and supply chain costs continue to rise, for example, with these broader pressures impacting all powertrains — electric or combustion.

“To shorten and summarize it: Yes, elevated oil prices and the renewed focus on energy security are likely to provide a mid term boost to BEV demand,” Michulski told CNBC by email.

“But this is best understood as an incremental shift rather than a sudden market wide acceleration. Electricity price risks, technological progress on the combustion side, and general economic uncertainty all act as counterweights,” he added.

An analysis published by Transport & Environment earlier this month found that electric cars were already cutting the European Union’s oil imports, noting that the nearly 8 million EVs in the EU will save the bloc around 46 million barrels of oil in 2025. That’s the equivalent of almost 3 billion euros ($3.45 billion) in avoided oil import costs.

In the context of the Middle East conflict, meanwhile, the analysis said that petrol drivers were expected to be five times more exposed to higher oil prices than EV owners.

Poliscanova said EV growth drivers in Asia, notably Vietnam, Thailand and Indonesia, which all benefit from affordable models by Chinese car manufacturers, were all likely to see an accelerated shift away from fossil fuels.

“We’re likely to see an even faster shift in some of these economies away from oil, meaning that we in Europe today, still discussing things like biofuels and hybrids, just look really stupid and detached from the reality,” Poliscanova said.

A spokesperson for the European Commission, the EU’s executive arm, declined to comment.

Wartime propaganda has evolved for the social media age, and Iran is now vying with the U.S. to be the world’s biggest keyboard warrior.

As the real-world bombardment in the Middle East continues and casualties mount, both sides in the month-old war are also firing off ironic, pop-culture-steeped memes on the online battlefield. Iran’s new leaders have quickly assumed an online fighting posture, amping up their memes and pointed attacks on the U.S. and Israel.

“What we’re seeing is not just a war of weapons, but it’s also a war of aesthetics,” said Nancy Snow, a professor and author who studies propaganda. “Whoever controls the meme controls the mood.”

Iran’s prime target is President Donald Trump, with state media and top officials alike relentlessly mocking and amplifying criticisms of the U.S. leader.

Top members of Iran’s parliament, its Revolutionary Guard and even its president, Masoud Pezeshkian, have sought to insult or undermine Trump in their messaging. And they’re using the world’s most popular social media platforms, such as Facebook and X, to get the word out.

Among the most striking examples: a series of seemingly AI-generated videos depicting Iranian military successes against the U.S. and Israel in a Legoesque cartoon art style.

One shows a panicked Trump ordering an airstrike after reviewing the “Epstein File” alongside Satan and Israeli Prime Minister Benjamin Netanyahu. Another, a rap diss track, calls Trump a “loser” and accuses him of being Netanyahu’s “puppet” over images of stock market sell-offs, missile strikes and coffins.

Those and other messages out of Iran regularly reference Jeffrey Epstein, the late notorious sex offender and former Trump friend at the center of conspiracy theories that the president launched the Iran war to distract the public from headlines about releases of files related to the Epstein investigation.

The plain intent of Iran’s messaging is not just to project defiance and counter U.S. assessments of Tehran’s military weakness, but also to undermine Trump by homing in on some of his biggest political vulnerabilities.

“Iran is blending grievance with meme culture — mixing Epstein, anti-war sentiment and pop visuals to penetrate fragmented Western audiences,” Snow said.

As for why they’re using Legos to convey their message, it may be because of their universal appeal, said Dan Butler, a political science professor at Washington University in St. Louis who uses the toys in his teaching.

“The same reason it works in education is the reason actors would use it for propaganda: people like Legos and will tune in to watch Lego-based films,” Butler told CNBC in an email.

“In fact if something is violent, using Legos might make people lower their defenses and also be more likely to share the material,” he said.

The Trump administration, meanwhile, has melded wartime messaging with internet culture even more literally.

In the early days of the war, official accounts shared videos splicing clips from sports, movies and video games into real footage of military strikes.

The visuals dovetail with the relentlessly bombastic and boastful rhetoric from Trump and Defense Secretary Pete Hegseth, who have repeatedly trumpeted the “obliteration” of Iran’s military while assuring that the U.S. is rapidly nearing its objectives for victory.

But the White House officials involved in creating the videos say they have proven effective in drawing attention and connecting with young people. One of them told Politico the efforts are meant to tout U.S. troops’ heroic work “in a way that captivates an audience.”

The White House told CNBC it intends to stick with its messaging strategy.

“The legacy media wants us to apologize for highlighting the United States Military’s incredible success, but the White House will continue showcasing the many examples of Iran’s ballistic missiles, production facilities, and dreams of owning a nuclear weapon being destroyed in real time,” spokeswoman Anna Kelly said.

On the latter metric, the strategy has been a success: Four videos posted on the official White House X account on March 5 and 6 have garnered nearly 100 million impressions as of April 1.

Iran’s goal isn’t to convince or corral its own people — who are reportedly facing extended internet outages — but rather to craft a “response offensive” to undermine the U.S. globally, Stahl said.

“There’s a lot of erosion with regard to potential [U.S.] ally support for this war, and these messages from Iran are playing right into that.”

It’s not all memes and trolling. Iranian officials are also homing in on the war’s destabilizing impact on the global economy and energy prices.

On Monday morning, Trump wrote on Truth Social that the U.S. is “in serious discussions with A NEW, AND MORE REASONABLE, REGIME to end our Military Operations in Iran.”

The S&P 500 ended the trading day lower while oil prices continued to rise.

Ghalibaf on Tuesday shared a CNN article on Americans struggling with the war-induced spike in U.S. gas prices.

“Sad, but this is what happens when your leaders put others ahead of hard-working and ordinary Americans. It’s not America First anymore … it’s Israel First,” he wrote.

Hello, this is Holly Ellyatt writing to you from London. Welcome to another edition of CNBC’s Daily Open.

Global markets will be on tenterhooks today after the White House said that U.S. President Donald Trump will deliver an address “to the nation to provide an important update on Iran” late on Wednesday evening.

The U.S. and Israel’s military operation against Iran is just over a month old but there’s a clear sense that war fatigue could be creeping in at the top, with Trump reportedly telling aides that he was willing to end the war without reopening the Strait of Hormuz.

Speaking of which, the president on Tuesday again lambasted European allies for not getting involved in the U.S.’ war, telling the U.K. and France to “Go get your own oil” from the Iran-blocked maritime passage.

Pace yourselves if you want to listen in to President Trump’s address on Wednesday giving an update on the Iran war — it’s set to take place at 9 p.m. ET — that’s 2 a.m. on Thursday London time.

“We leave because there’s no reason for us to do this,” Trump told reporters at the White House. “We’ll be ‌leaving very soon.” He also seemed to dismiss the idea of having to reach a negotiated settlement to end the war, signaling that the U.S. could just declare victory and end hostilities.

Global markets certainly like the idea of the war ending sooner rather than later: Asia-Pacific markets rebounded overnight while European bourses look set to rally at the open on Wednesday. U.S. stock futures also ticked higher on hopes that Trump is looking for an off-ramp to the war, which has sent global energy prices rocketing. Crude oil prices once again extended gains overnight.

We’ll have to wait and see what the president says later, but he’ll be mindful that this war has never had much support from U.S. voters and the majority want him to focus on domestic matters — ‘America First,’ remember?

Speaking of voting, the president signed an executive order on Tuesday cracking down on mail-in voting ahead of the 2026 midterm elections in November. The move did not go down well with voting-rights advocates, who warned it could disenfranchise millions of Americans.

It’s April Fool’s Day, so watch out for any news that seems too outlandish – I know, it’s getting harder these days.

— Holly Ellyatt

Oracle cutting thousands in latest layoff round as company continues to ramp AI spending

Gasoline prices over $4 a gallon, part of an ongoing supply shock in the energy markets, might seem like a cue for the Federal Reserve to raise interest rates to head off inflation. At least for now, that looks like a bad bet.

Investors instead expect the central bank to hold benchmark rates steady, or even pivot back toward cuts later in the year as policymakers weigh the risk that higher energy prices will slow growth more than they fuel lasting inflation.

In market-moving remarks Monday, Fed Chair Jerome Powell signaled that raising rates now could be the wrong medicine for an economy already facing a softening labor backdrop and elevated recession concerns on Wall Street.

Asked whether he thought policymakers should consider rate increases here, Powell responded: “By the time the effects of a tightening in monetary policy take effect, the oil price shock is probably long gone, and you’re weighing on the economy at a time when it’s not appropriate. So the tendency is to look through any kind of a supply shock.”

The comments come at a critical juncture for markets, which have struggled to get a handle on the Fed’s intentions amid a bevy of conflicting and perpetually shifting economic signals.

Just a few days ago, traders began to entertain the possibility that the Fed’s next move could be a hike. That mindset followed some unsettling inflation news: Import prices rose much more than expected in February, even ahead of the war-related oil spike, while the Organization for Economic Cooperation and Development raised its U.S. inflation forecast dramatically, to 4.2% for 2026.

However, Powell’s comments — complete with the usual Fed qualifiers that there are potential cases for both hikes or cuts — helped bring the market back off the hawkish position. Before the war, markets had been looking for two and possibly even three cuts this year in anticipation that inflation could continue to drift back to the Fed’s 2% target and central bankers would switch their focus to supporting the labor market.

Futures prices Tuesday morning pointed to just a 2.1% chance of a rate hike by year-end, according to the CME Group’s FedWatch tool. That’s despite headlines noting that regular unleaded gasoline had eclipsed $4 nationally at the pump and U.S. crude oil priced above $102 a barrel.

While there’s still plenty of uncertainty about where rates are headed, Wall Street commentary shifted back to expectations for cuts. To be sure, odds are still low for a reduction — about 25% — but they have climbed considerably over the past two days.

“Central bankers’ bark will be bigger than their bite” when it comes to fighting higher prices, wrote Rob Subbaraman, head of global macro research at Nomura.

“Right now, it makes sense for central banks to do nothing but sound hawkish in order to help anchor inflation expectations as headline inflation spikes,” he added. “However … the pass-through to wage growth and core inflation is likely to be limited, and instead the Middle East war could quickly morph into a global growth shock.”

Indeed, concerns about the impact that the oil price spike will have on growth superseded the worries about consumer prices, echoing Powell’s worry that hiking now won’t fix energy costs and could cause more trouble later. Policymakers are worried less about the immediate hit from energy-driven inflation than the risks that higher prices could sap consumer demand and hiring.

Joseph Brusuelas, chief economist at RSM, said central bankers should fear “demand destruction” brought on by the energy shock.

“Time is not an ally of the American economy,” he wrote. “The bigger risk is what comes next: demand destruction. That’s the economic term for what happens when high prices force people and businesses to spend less. It sounds abstract, but it’s very concrete — it means fewer cars sold, fewer homes bought, fewer restaurant meals, fewer business investments, and eventually fewer jobs.”

The Fed is in a bind policy-wise, Brusuelas added: Raising rates now risks slowing economic growth further, while standing put runs the chance that the oil situation gets worse.

JetBlue Airways is raising bag fees at least $4 as jet fuel prices soar amid the Iran war.

Airfare has climbed for routes around the world since the U.S. and Israel attacked Iran on Feb. 28. The higher fees for checked bags are the most recent sign of airlines passing steeper fuel costs down to U.S. consumers. Jet fuel is airlines’ biggest expense after labor.

JetBlue now lists the price to check a first piece of luggage for domestic, Caribbean and Latin America flights as $39 for off-peak periods for most economy passengers, up from $35. For peak periods, like much of the summer and major holidays, the fee will go up to $49 from $40.

If paying less than 24 hours before departure, such as at the airport, travelers will pay $10 more. Airlines have charged customers less for prepaying for their checked baggage in recent years.

There are exemptions to the bag fees entirely, however, such as travelers with a co-branded credit card and frequent flyers with elite status.

“As we experience rising operating costs, we regularly evaluate how to manage those costs while keeping base fares competitive and continuing to invest in the experience our customers value,” JetBlue said in a statement to CNBC.

When an airline raises fees, competitors often follow. American Airlines, United Airlines, Delta Air Lines, Southwest Airlines and Frontier Airlines didn’t immediately respond to CNBC’s requests for comment.

Fuel prices for Chicago, Houston, Los Angeles and New York averaged $4.57 a gallon last Friday, up nearly 83% since the day before the war began, according to data from Argus published by industry group Airlines for America.

“Adjusting fees for optional services used by select customers, such as checked baggage, allows us to continue offering more competitive fares while delivering the onboard experience our customers love, including complimentary snacks and drinks, unlimited, high-speed Wi-Fi and seatback entertainment screens,” JetBlue said. “While we recognize that fee increases are never ideal, we take careful consideration to ensure these changes are implemented only when necessary.” 

U.S. President Donald Trump said Monday that the U.S. will “completely” obliterate Iran’s electric generating plants, oil wells and Kharg Island if the strategically vital Strait of Hormuz is not “immediately” reopened and a peace deal is not reached “shortly.”

“The United States of America is in serious discussions with A NEW, AND MORE REASONABLE, REGIME to end our Military Operations in Iran,” Trump said in a post on Truth Social.

“Great progress has been made but, if for any reason a deal is not shortly reached, which it probably will be, and if the Hormuz Strait is not immediately “Open for Business,” we will conclude our lovely “stay” in Iran by blowing up and completely obliterating all of their Electric Generating Plants, Oil Wells and Kharg Island (and possibly all desalinization plants!), which we have purposefully not yet “touched.””

His comments come as the Iran war enters its fifth week and as the Trump administration weighs sending in ground forces to seize Kharg Island, a major fuel hub which serves as the centerpiece for Iran’s oil industry.

It is estimated that around 90% of the country’s crude exports pass through it before tankers then travel through the Strait of Hormuz. The island is also said to have a loading capacity of roughly 7 million barrels per day.

Iran has not yet commented on Trump’s latest remarks. Earlier in the day, a spokesperson for Iran’s Foreign Ministry reportedly said Iran deemed proposals presented in a 15-point plan from the U.S. as “excessive and unreasonable.” Iran’s leaders have denied being in direct talks with the U.S.

Shipping traffic through the Strait of Hormuz has virtually ground to a halt since the U.S. and Israel launched strikes against Iran on Feb. 28. Iran has retaliated by targeting ships trying to pass through the maritime corridor, with several incidents reported in recent weeks.

Trump said last week that he would pause attacks on Iran’s energy plants for 10 days, which pushed the deadline to April 6.

Oil prices traded higher on Monday, with international benchmark Brent crude on track to notch its steepest monthly rise on record.

U.S. President Donald Trump said he has “no problem” with a Russian crude tanker delivering fuel to Cuba, appearing to reverse course over his administration’s oil blockade as the island grapples with a deepening energy crisis.

Speaking to reporters aboard Air Force One on Sunday, Trump said: “If a country wants to send some oil into Cuba right now, I have no problem with that, whether it’s Russia or not.”

His comments come as a Russian-flagged oil tanker, the sanctioned Anatoly Kolodkin, makes its way to Cuba carrying an estimated 730,000 barrels of crude oil.

The tanker is reportedly expected to reach port on Monday and is seen as something of a lifeline to the Caribbean nation, which is facing its biggest test since the collapse of the Soviet Union.

Cuba had been heavily dependent on oil supplies from Venezuela, but it has effectively been cut off since early January when the U.S. launched an extraordinary military operation to depose Venezuelan President Nicolás Maduro.

The Trump administration subsequently threatened to impose tariffs on any country that sent crude to Cuba, prompting the likes of Mexico to halt shipments. The Kremlin has previously shrugged off Trump’s tariff threats, pointing out that Washington and Moscow “don’t have much trade right now.”

Cuba’s President Miguel Díaz-Canel said last week that the island hadn’t received oil shipments in more than three months. The communist-run country, which has said it is holding talks with the U.S., has sought to dramatically increase its solar power generation amid the ongoing fuel shortage.

The island of roughly 10 million people has faced a series of power blackouts in recent weeks and the United Nations has warned that Cuban hospitals have been struggling to maintain emergency and intensive care services.

“Cuba is finished, they have a bad regime and they have very bad and corrupt leadership and whether or not they get a boat of oil it’s not going to matter,” Trump said Sunday.

“I prefer letting it in, whether it’s Russia or anybody else, because the people need heat and cooling and all of the other things that you need,” he added.

TOKYO/NEW YORK — Genevieve Price considers herself a great flight hacker.

The 35-year-old naturopathic doctor based in San Diego usually buys basic economy tickets when she visits her family in New Jersey and then uses her Alaska Airlines frequent flier status to pick a seat, something that’s usually not allowed for those no-frills fares.

“I like to travel a lot,” Price told CNBC at New York’s John F. Kennedy International Airport, where she was returning from Rome.

But Price said she has her limits, and is planning to cap the spending she does on future flights, such as no more than $900 to Rome, where her partner is from.

Consumers’ willingness to fly is being put to the test this spring as soaring fuel prices are leading to higher airfares. Cathay Pacific, SAS, Finnair and others are among the carriers that have already raised fares.

Travelers also have to contend with hourslong airport security lines in the U.S. because of the second government shutdown in half a year that’s hitting the Transportation Security Administration, leaving many frustrated.

Fuel at major U.S. airports was going for $3.98 on Wednesday, up nearly 60% since before the U.S. and Israel attacked Iran on Feb. 28.

The conflict has meant crisis for the aviation industry, particularly in the Middle East, where airspace closures have forced carriers to cancel flights and take longer and costlier routes.

Airlines will brief investors starting early next month on the longer-term impacts, but they immediately started raising airfare or increasing fuel surcharges on tickets to help cover the rising costs.

DHS has blamed Democrats for the closure, which has become the longest partial shutdown in U.S. history. As of Friday afternoon, the Senate had passed a potential deal to end the shutdown, thought its fate was unclear.

Retail firms are warning that the conflict in the Middle East is driving up costs and could lead to price hikes if the war continues beyond the short term. 

Instability in the Middle East region will not only restrain growth in the region but is also likely to have a knock-on effect on costs, selling prices, and consumer demand in the rest of the business, warned British retailer Next on Thursday. 

The company has accounted for £15 million ($20 million) of additional costs likely to arise from the conflict, such as fuel and air freight, assuming the disruption lasts for three months. Increased costs will not affect guidance as they have been offset by savings elsewhere, it added.

“Beyond the next three months, if we see these costs persist, then we will begin to pass costs through as higher pricing,” the company said early on Thursday as it reported results for the fiscal year ending January. The Middle East represents about 6% of Next’s total turnover. 

An extended war in the Gulf region could mean a double whammy for retailers as it may increase inflationary pressures and disrupt supply chains, leading to an overall higher cost base. It could also hurt demand as consumers are increasingly squeezed by the increased cost of living, resulting in less spending on discretionary items. 

The Iran war and effective closure of the Strait of Hormuz have sent oil and gas prices soaring since the first strikes on Feb. 28, and has upended inflation forecasts in Europe and beyond. 

Companies’ price-hike expectations and wages for new hires were some of the key inflation indicators that the European Central Bank will monitor, its Chief Economist Philip Lane said on Wednesday.

H&M said Thursday that “current geopolitical instability in the Middle East could, if extended, result in slightly additional cost pressure.”

H&M early Thursday reported first-quarter local currency sales that declined by 1%, but good cost control helped the company beat expectations on profitability, the company said. It was “a quarter marked by cautious consumption and large currency translation effects,” it said.

Shares fell 2.2% in late morning trading, partially paring earlier losses. 

Next shares, meanwhile, rose 5% after the London-listed fashion brand bumped up its pretax profit guidance by £8 million to £1.21 billion for the upcoming year.

“We see this update as reassuring on the strong UK trading and implied ability to pass-through costs, vs a well-known [Middle East] disruption,” Jefferies analysts said about Next’s print.