US Strikes on Iran May Trigger New Wave of Inflation
The US economy is now facing a serious oil price shock after American forces struck three nuclear sites in Iran. The geopolitical ripple effect has sent crude oil markets into high alert, reigniting fears of inflation just as consumer prices were starting to stabilize.
Oil prices are projected to jump by $5 per barrel when trading resumes on Sunday. If that happens, the cost of gas and diesel could rise dramatically, just when many Americans had grown used to sub-$3 prices at the pump.
$80 Oil on the Horizon—What Comes Next?
“We are looking at $80 oil on the open,” said Andy Lipow of Lipow Oil Associates. That’s a significant bump from recent levels, where US crude hovered between $60 and $75 per barrel for much of the past year. If this surge holds, it could erase recent gains made in cooling inflation.
The initial reaction is driven by fear and uncertainty, but experts caution against overreacting.
“Just because oil prices spike doesn’t mean they’ll stay elevated,” said Joe Brusuelas, chief economist at RSM.
Markets have reacted this way before—only to settle down shortly after.
All Eyes on the Strait of Hormuz
Whether the oil surge is temporary or sustained depends heavily on how Iran responds.
The Strait of Hormuz, a strategic waterway that handles 20% of global oil traffic, could be a major flashpoint. On Sunday, Iran’s Foreign Minister hinted at “a variety of options,” and some Iranian officials have openly called for the closure of the Strait.
That move would have global consequences.
“If Iran shuts down the Strait, it risks sparking a larger military conflict,” said Bob McNally of Rapidan Energy Group.
Notably, China—which buys a third of the oil shipped through Hormuz—could play a diplomatic role in keeping the strait open.
“I encourage the Chinese government to speak with Iran,” said Secretary of State Marco Rubio on Fox News. “They depend on it more than we do.”
How Soon Will Americans Feel the Pain?
Gas prices could spike within hours, says Patrick De Haan from GasBuddy. He explains that while retail stations typically delay price changes by a few days, major oil jumps often trickle down to consumers faster.
If the Strait of Hormuz becomes a conflict zone, oil could shoot to $100 a barrel, pushing pump prices up by 75 cents per gallon, Lipow warns.
Tariffs + Tension = Trouble for Inflation
Fuel prices aren’t the only concern. Trump’s trade tariffs—combined with instability in the Middle East—are setting the stage for another inflation wave.
“We’re expecting inflation to move faster and higher in the next 90 days,” said Brusuelas.
While inflation cooled this spring, many economists believe it was only a temporary break. If energy prices keep climbing, they’ll affect everything from shipping to groceries.
What’s at Stake?
For now, much depends on whether Iran escalates tensions further. If oil infrastructure in the Persian Gulf becomes a target or the Strait is blocked, the global economy could feel the aftershocks—especially nations that heavily rely on Gulf oil.
The US, by contrast, imports far less from the region. But that doesn’t mean it’s insulated from higher global prices or supply chain disruptions.
Stay tuned to Maple Wire for the latest on global oil markets, inflation trends, and the US economy.
