Iran-induced crude oil spike fueled March inflation surge, further souring consumer sentiment

Trend watch

Spring break is effectively now in the rearview mirror, with just 5.2% of schools scheduled to take their break in next two weeks. The weekly air passenger count dipped 1.8% to 17.4 million in the past seven days. Still, it’s at an all-time high on a year-to-date basis, up 1.8% compared to 2025.

We’ll continue to include the personal tax refunds chart (slide 7, available to clients in the full report) through the end of tax filing season.

Our take

We are encouraged that a tenuous cease fire appears to be in place in the Middle East. Furthermore, we’re hopeful that a lasting peace can be brokered.

From a price and global supply perspective, however, the economic damage has been done. Roughly 800 million barrels of crude oil should have passed through the strait of Hormuz since the Iran War started.

Even if the Strait of Hormuz was reopened immediately, restarting the flow of crude oil won’t be fast or easy. The first step would be to the massive maritime queue of an estimated 400 crude oil tankers trapped in the Persian Gulf, plus several hundred other vessels. Given the pre-conflict average was of over 100 to 138 ships per day, it would likely take more than a week to clear the logjam.

Then there’s restarting crude production, including re-pressurizing fields and restarting wells that were shut-in, which is an estimated at 9.1 million barrels per day (mbd). That’s not to mention the extensive rebuilding that must happen at over 40 crucial energy assets—including refineries, pipelines, and oil fields—damaged in the Persian Gulf region. Energy infrastructure in at least nine countries have hobbled producers like Saudi Arabia, United Arab Emirates, Qatar, and Kuwait. Initial estimates put the rebuild needed to repair some of these facilities at more than six months, while others will likely take much longer.

Alas, just the impact on the global energy supply will linger for the remainder of this year and likely into next. Again, while the U.S. is largely insulated from an energy supply shock since more than 90% of our supply is sourced within North America, the secondary impact – through global supply chains and the global economy – will be more dramatic and lasting.

Equally, the push higher in inflation – replete with continued pain at the pump and the sour consumer vibe – will linger for months. While we believe that the U.S. economy will power through these challenges, mostly due to resilient consumers, the journey ahead probably won’t feel like a fun ride.

Bottom line

Despite a tentative ceasefire, global energy damage is already done. Restarting the disrupted global oil flow—from transport, production, and damaged infrastructure—will take months. As a result, global supply impacts are likely to persist into next year, with the U.S. buffered but still exposed through global economic spillovers. This will keep the U.S. economy feeling like it has one foot on the gas—driven by fiscal stimulus—and one foot on the brake, reflecting trade and tariff uncertainty, underwhelming job growth, and now the Iran situation.