The Iran war’s shockwaves are now hitting American wallets from the pump to the grocery aisle to your Amazon delivery fee.
If you’ve pulled up to a gas station lately and done a double-take at the price, you’re not imagining things. The Consumer Price Index released this morning showed that inflation rose at a 3.3% annual rate in March the highest reading since May 2024 driven almost entirely by a 21% surge in gasoline prices tied to the US-Israeli military operation against Iran, codenamed “Operation Epic Fury,” which began on February 28.
The national average has crossed $4 per gallon, up from roughly $2.98 just six weeks ago. California, which always bears the brunt of fuel shocks due to its strict environmental blend requirements and limited pipeline connections to the rest of the country, is already seeing averages above $5.87. Diesel the silent engine behind your groceries, your online orders, and everything that gets shipped anywhere has crossed $5.62 per gallon, up nearly 50% since the conflict began.
“This is really quickly going to ignite additional inflation.” — Patrick De Haan, Head of Petroleum Analysis, GasBuddy
The ripple effects are showing up in unexpected places. The US Postal Service announced its first-ever 8% fuel surcharge on packages, effective April 26. United Airlines CEO Scott Kirby warned employees that jet fuel costs have more than doubled in three weeks, adding a potential $11 billion in annual expense. Amazon has levied a 3.5% fuel surcharge on third-party sellers, and Delta and JetBlue have both raised checked baggage fees.
The administration has not been idle: 172 million barrels from the Strategic Petroleum Reserve have been released as part of a 30-nation coordinated injection of 400 million barrels into global markets. President Trump has also temporarily waived the Jones Act to allow foreign vessels to deliver fuel to the West Coast and Northeast.
The Federal Reserve is widely expected to hold rates steady when it meets later this month. But with some economists projecting inflation could hit 4% by April and oil prices potentially approaching $100+ per barrel if the Strait of Hormuz remains disrupted, everyday Americans are increasingly feeling the squeeze in ways that go well beyond the pump.
