Argentina's inflation could rise up to 2.5 points from Middle East war‑driven energy price surge

A recent technical report by the United Nations Economic Commission for Latin America and the Caribbean (CEPAL) warns that the escalation of the war in the Middle East, which has pushed international oil prices higher, could add between 0.9 and 2.5 percentage points to Argentina’s annual inflation rate in 2026. The analysis models three scenarios based on a 60 % pass‑through of international fuel price changes to domestic consumer prices: a 25 % rise in energy prices would increase inflation by 0.9 points, a 38 % rise by 1.4 points, and a 67 % rise by 2.5 points. Across the region, the same price shock could lift inflation by 0.3 to 4.6 points.

CEPAL notes that the ultimate impact will depend on how much of the international price increase is transferred to local fuel and electricity tariffs, as well as on any mitigation measures adopted by governments, such as subsidies or fiscal buffers. The report also links the price surge to disruptions in the Strait of Hormuz, a key oil transit route, and highlights secondary effects on imported goods and transport costs.

The findings come as Latin America’s overall energy inflation has tripled to 6.41 % between March and May, underscoring the broader regional pressure from higher energy costs.