Inflation in the United States has risen to its highest level in nearly two years, as escalating tensions linked to the Iran conflict continue to push global oil prices higher and strain the economy.
Data released by the U.S. Department of Labour shows that consumer prices increased by 3.3 percent in the 12 months to March, up from 2.4 percent recorded in February. The jump marks the sharpest monthly rise since 2022, when global markets faced an energy crisis during the Russia-Ukraine War.
The surge has been driven largely by rising fuel costs, linked to disruptions in global supply chains and instability around the Strait of Hormuz, a critical corridor for crude oil shipments.
Gasoline prices rose by 21.2 percent between February and March, the steepest increase since records began in 1967, while fuel oil prices climbed by more than 30 percent, marking their largest gain in over two decades.
The effects have been felt across the country, particularly in California, where fuel prices remain well above the national average. As of early April, gasoline averaged $5.93 per gallon in the state, compared to $4.16 nationwide.
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Consumers are already adjusting to rising costs, with many cutting back on travel and discretionary spending as transportation expenses increase. Prices for airline tickets and clothing have also risen, reflecting higher operating costs and persistent trade pressures.
Although food prices remained relatively stable in March, analysts warn that sustained increases in fuel and logistics costs could soon push food prices higher.
Economists describe the current trend as an energy-driven inflation spike, cautioning that prolonged disruption in oil supply could extend inflationary pressures across multiple sectors.
Despite the rise, officials say some indicators point to underlying resilience. Core inflation, which excludes food and energy, rose modestly to 2.6 percent, suggesting that broader price pressures remain contained.
However, the development has reduced expectations that the Federal Reserve will cut interest rates in the near term, as policymakers remain cautious about persistent inflation risks.
With geopolitical tensions unresolved and energy markets still volatile, analysts say the direction of inflation will depend largely on how quickly global oil supply stabilises.
