Forecasters report the Iran war has pushed inflation to 6% annually, doubling previous projections after an oil supply crunch fueled higher prices.

Rising Oil Prices Are Expected to Double Inflation: Experts Forecast Economic Impact

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Diccon Hyatt

Full Bio Diccon Hyatt is an experienced financial and economics reporter. He's written hundreds of articles breaking down complex financial topics in plain language, emphasizing the impact that economic currents would have on individuals' finances and the market. He has a Bachelor's degree in English from the University of Delaware.

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Published May 15, 2026

03:48 PM EDT

Stacked coins dollar bills and a large percentage symbol of 6 in a blue circle

Inflation could rise substantially if forecasters are correct. Investopedia / Elizabeth Guevara

KEY TAKEAWAYS

Economists expect inflation to rise to 6% in the second quarter, doubling earlier forecasts.
Rising oil prices, driven by the Strait of Hormuz closure, are fueling higher transportation and product costs.
Economic growth projections for 2026 have been lowered to 2.2%, reflecting inflation's broader impact.

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If your household budget has struggled to keep up with inflation around 3%, just wait until it doubles.

Economists now expect the Consumer Price Index to rise at an annualized 6% rate in the second quarter, according to a survey of 33 professional forecasters by the Federal Reserve Bank of Philadelphia released Friday.1 That’s more than double the prewar forecast of a 2.7% inflation rate, which was largely based on late February readings before the war in Iran caused an oil crunch and sent fuel prices soaring, and well above the 3.1% inflation rate in the first quarter of the year.23

The survey highlights how the closure of the Strait of Hormuz has triggered a chain of price increases, shaking up the economic outlook. Fuel prices have surged more than $1.50 a gallon since February, according to AAA, and those higher transportation costs are showing up in all kinds of products. Inflation is now running at its highest since 2023, and will be at its highest since 2022 if the forecast is correct.

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Higher prices are denting economic growth, too. Forecasters now expect the economy, as measured by the Gross Domestic Product, to grow 2.2% in 2026, down from 2.5% in the previous forecast.

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