Brent crude oil traded at approximately $110 to $112 per barrel on March 21, having surged from roughly $75 to $80 per barrel before the U.S.-Israel war with Iran began on February 28 — an increase of approximately 45 to 50 percent in less than four weeks. The primary driver is the partial closure of the Strait of Hormuz, through which roughly 20 percent of the world's oil supply normally passes, combined with the wandering of approximately 200 tankers unable to transit the strait. CNBC reported on the oil price surge extensively, and NPR noted the Iran war has pushed gasoline prices to their highest level in years, with the national average rising approximately 14 percent in a single week during early March. California's average gasoline price exceeded $5 per gallon by the second week of March 2026, according to AAA data cited by TIME.

The energy shock is rippling through the broader economy. Moody's chief economist Mark Zandi warned that "consumers threaten to be hammered by the surge in oil prices," adding that inflation will "quickly accelerate, cutting into consumers' purchasing power and hitting consumer spending, GDP and jobs." JPMorgan noted that as businesses begin passing higher energy input costs to customers, the inflationary impulse could spread beyond transportation and energy into food and manufactured goods. LNG spot prices in Asia more than doubled to three-year highs following QatarEnergy's declaration of force majeure at its Ras Laffan LNG plant — the world's largest liquefaction facility — which handles approximately 20 percent of global LNG production.

The Federal Reserve cited the Iran war's oil disruption directly in its March 18 decision to hold interest rates steady, with Chair Powell noting that "near-term measures of inflation expectations have risen in recent weeks, likely reflecting the substantial rise in oil prices." Fox Business confirmed the Fed's rate hold and Powell's remarks, while noting that the administration's dramatic expansion of domestic oil production — with U.S. output at record levels — provides a structural buffer that limits how severely domestic consumers are affected relative to countries more dependent on Middle Eastern imports. The Trump administration lifted temporary sanctions on some Iranian oil already loaded on ships, adding an estimated 140 million barrels to the global market through April 19 to partially relieve the supply shock.

CNBC reported that oil prices could climb further in the near term if Trump's 48-hour ultimatum — issued March 21, demanding Iran fully reopen the Strait or face strikes on power plants — leads to additional escalation. Conversely, if diplomatic channels achieve even a partial reopening of the strait, oil prices could fall sharply. The World Economic Forum estimated the global economic cost of the Iran war at hundreds of billions of dollars in lost trade and energy disruption over its first three weeks. Al Jazeera reported on the disproportionate impact on energy-importing developing nations, where fuel and food prices have risen even faster than in the United States. The combination of an oil supply shock and a weakening U.S. job market — February saw 92,000 jobs lost — has raised the specter of stagflation that most economists had considered a low-probability scenario at the start of 2026.