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World Economy
Apr 11, 2026

US Inflation Surges to 1% in March Amid Iran War and Energy Market Disruptions

AI Summary
The US inflation rate rose to 0.9% in March, driven by a significant increase in energy prices due to the war on Iran and the subsequent blockade of the Strait of Hormuz.

The United States has experienced a notable surge in inflation, with consumer prices rising by nearly 1 percent in March. This significant increase, one of the highest short-term inflation rates in years, is largely attributed to the disruption of energy markets amid the ongoing conflict with Iran.

According to a report by the US Bureau of Labor Statistics, the inflation rate in March was 0.9 percent, up from 0.3 percent in February. This marks the largest increase since May 2022, during the peak of the cost-of-living crisis triggered by the COVID-19 pandemic.

The March increase was primarily driven by energy prices, with gasoline prices surging by 21.2 percent and fuel oil prices increasing by more than 30 percent. The energy index saw a 10.9 percent increase in March, the largest monthly rise since September 2005.

The escalation in prices followed the US and Israel's launch of an all-out war on Iran on February 28, which resulted in the killing of Iran's Supreme Leader Ali Khamenei. In response, Tehran closed the Strait of Hormuz, causing oil and gas prices worldwide to skyrocket. The price of a barrel of oil reached $120, up from about $70 on February 27.

In the US, the price of one gallon of gasoline exceeded $4.1, a significant increase from less than $3 before the conflict began. Although a two-week ceasefire was agreed upon between the US and Iran, marine traffic in the Strait of Hormuz remains at a fraction of its pre-war levels.

US President Donald Trump has warned Iran against blocking the strait or charging vessels for safe passage. About 20 percent of the world's oil passes through the Strait of Hormuz. While the ceasefire has brought some relief to the global energy market, with oil prices dropping to less than $100, US consumers are still paying $4.15 on average at the petrol pump.

Experts suggest that it will take several months for prices to stabilize. The inflation report comes as US politicians focus on the cost of living and affordability, ahead of the November midterm elections. Trump's Democratic rivals have criticized him for launching the war without congressional approval, highlighting the increased economic costs for Americans.