US-Iran conflict drives up fuel prices and inflation

Escalating tensions between the United States and Iran have triggered significant volatility in global energy markets and the American economy. Following military actions involving the US and Israel against Iran, fuel prices have surged. In the US, gasoline prices rose from under $3.00 per gallon to nearly $4.50 per gallon, while diesel reached a record high of $6.52 per gallon.

This energy spike has contributed to rising inflation, with the Consumer Price Index (CPI) increasing from 2.4% in February to 3.4%. Consequently, the Federal Reserve has faced pressure to raise interest rates. The conflict has also impacted financial markets, driving 10-year Treasury yields from 3.96% to nearly 5%.

Amidst the tension, Iranian President Masoud Pezeshkian stated at the United Nations General Assembly that Iran “will never surrender to the US,” though he noted that diplomacy remains an option for resolving the conflict. Global crude oil prices have responded to these developments, with Brent crude rising to $103.08 per barrel.