The consumer price index rose 3.3% year over year in March 2026, up from 2.4% in February, according to the Bureau of Labor Statistics.

The Iran war has caused oil prices to spike — raising prices for gasoline and airfare, and leading to higher prices for food and e-commerce purchases.

It may take weeks or months for conditions to normalize, even if there is a quick resolution to the Middle East conflict.

Inflation spiked in March as the Iran war pushed up gasoline and other prices for consumers.

The consumer price index, a key inflation measure, rose 3.3% in March from a year earlier, the U.S. Bureau of Labor Statistics reported Friday. That’s up from 2.4% in February.

The March data release represents the first CPI report since the Iran war started on Feb. 28, and illustrates the financial fallout for consumers from the first month of fighting in the Middle East.

While the U.S. and Iran agreed to a two-week ceasefire late Tuesday, economists commented that the inflationary effects of the war will likely take several weeks or months to unwind — and that a prolonged conflict risks raising consumer prices more broadly, to areas like food, airfare and manufactured goods.

“Inflation is a problem and it’s only going to get worse,” mentioned Mark Zandi, chief economist at Moody’s. “Clearly, the war in Iran is doing significant damage.”

“We were cautiously optimistic on inflation heading into this year,” as price pressures like those from tariffs were unwinding, commented Thomas Ryan, a North America economist at Capital Economics. This also touches on aspects of portfolio.

“Basically, we’re on hold now, just to see what happens with the energy price shock,” Ryan commented. “If it’s long-lasting, we become more concerned about leakage” into other areas of consumers’ wallets, he stated.

The Iran war’s inflationary bump also complicates the Federal Reserve’s job of setting interest rate policy.

At the March meeting, officials at the central bank noted they expect to cut interest rates once this year, though some mentioned it may be necessary to raise borrowing costs if the Iran war leads to sustained higher inflation.

Fed officials also stated they would need to remain “nimble” as they weighed the impact the war had on inflation, which continues to hold above the central bank’s 2% target.

“Inflation is well above anyone’s comfort level — both consumers and the Federal Reserve — and that’s not going to get any better, at least in the next few months,” Zandi stated.

The Iran war’s effect on oil and gas prices

The recent run-up in energy prices ties back to oil.

Iran has effectively choked off ship traffic through the Strait of Hormuz, a waterway used to transport about a fifth of the world’s oil supply. The blockade appears to largely still be intact even after the ceasefire, according to reports.

Oil prices — as measured by Brent crude oil, a global price benchmark — spiked to $118 per barrel by the end of March from roughly $70 per barrel before the conflict began. Prices have since declined, but remain elevated at around $96 as of Friday.

“There’s positive news now, because we have a two-week ceasefire and hopefully that holds,” remarked Joe Seydl, a senior markets economist at J.P. Morgan Private Bank. “Otherwise we’re looking at the largest oil supply shock in post-World War II history.”

Products refined from oil — such as gasoline, diesel and jet fuel — have risen sharply, too.

Retail gasoline prices soared 18.9% over the year, according to the CPI data.

Consumers paid $4.12 per gallon, on average, as of Monday, according to the U.S. Energy Information Administration’s latest weekly data — up from about $2.94 before the war started.

The jump above $4 a gallon was the first time the national average price had breached that price threshold since 2022, when Russia’s invasion of Ukraine sent prices soaring, according to EIA data.

Airfare, food and e-commerce under pressure

Meanwhile, higher oil prices are impacting other areas of household finances as well.

For example, airlines are raising ticket prices, increasing bag fees, adding fuel surcharges and cutting flight schedules to manage the fallout from the Iran war — all of which boost the price tag for travelers.

Companies are doing this to offset higher jet fuel prices, one of airlines’ largest operational costs.

Airfares rose 14.9% over the past 12 months, according to the CPI data.

The hike is especially pronounced for international flights: For example, an average round-trip economy fare from the U.S. to Rome cost $1,165 as of March 30, up from $846 on Feb. 23, a travel search engine. A round, according to the most recent weekly flight data compiled by Kayak-trip ticket to Hong Kong rose to $1,403 from $1,042 over the same time period.

If jet fuel prices stay near their current levels for a full year, airlines would have to rise ticket prices about $50 for each one-way fare, or about 17%, Deutsche Bank analysts wrote in a report Tuesday.

Food prices are another area that may see upward pressure due to rising oil prices, economists remarked.

For example, an growth in diesel prices impacts the transportation costs associated with trucking food to grocery stores, they mentioned. Additionally, fertilizer is another key export through the Strait of Hormuz, threatening to raise prices for farmers and consumers.

Food prices increased 2.7% over the last year, according to the CPI data. Some categories like beef and coffee have seen prices surge even more due to idiosyncratic issues that have reduced supply.

Americans may also see costs surge for purchases through e-commerce sites. Amazon will start levying a 3.5% fuel and logistics surcharge for third-party sellers in the U.S. and Canada on April 17. Other shipping carriers like United Parcel Service and FedEx have also imposed higher fuel surcharges since the start of the Iran war.

Some of the inflationary effects of energy prices may take months to feed through supply chains and flow through to consumers’ wallets, noted Ryan, of Capital Economics. The impact “could be very broad,” he stated.

Why Iran war inflation may unwind slowly

Of course, the ultimate inflationary impact will depend on the contours of the conflict.

If the conflict stops by the end of April and the Strait of Hormuz gradually opens, CPI inflation would likely decline “relatively quickly,” Ryan commented. He expects it to peak at about 4% and drop to 3% by the end of 2026, he commented.

a prolonged war would keep inflation high and raises the odds of a broader pass, on the other hand-through into goods and services, he stated.

Even if more oil tankers start flowing through the Strait of Hormuz, it may take a while for things to normalize, economists remarked.

For example, damage from strikes on energy infrastructure in the Middle East will take time to fix, they stated.

Seydl, of J.P. Morgan Private Bank, used the expression “up like a rocket and down like a feather” to describe the likely price dynamics, meaning prices for gasoline and other areas of household balance sheets are often quick to rise during a shock, but then slow to fall.

There is also likely to be an enduring “risk premium” on the price of oil once the conflict resolves, Seydl noted. “Investors know this happened and can happen again,” he stated.

Higher ancillary airline fees, like those for checked bags, may also be permanent, especially if demand remains strong, analysts noted.