Argus

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Mar 16, 2026

Market Outlook

Bullish

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Short

Summary

Wars -- particularly in the oil-rich Mideast -- impact inflation. In the current situation, oil prices have jumped sharply since fighting began, and we likely will see the effects of that in several price factors in the months ahead. Let's take a look at the numbers. Crude oil prices are up almost 60% in the past month from a low of $55, with a barrel of the U.S. benchmark West Texas Intermediate changing hands at about $100. Meanwhile, the inflation-related Consumer Price Index (CPI) report last week indicated that gasoline prices were up 0.8% month over month but still down 5.6% year over year. That's going to change fast. Other elements of the CPI likely are headed higher in the near term as well, including electricity and transportation services. Ultimately, higher energy prices may well filter through to every CPI category. From an historical standpoint, we note that a $10 increase in the price of oil generally lifts the overall inflation rate by 20 basis points. Doing the math, the conflict in Iran may raise the core inflation rate of 2.5% to above 3.0%, depending on how long the fighting lasts. Later this week, the Bureau of Labor Statistics will be releasing its other inflation report, the Producer Price Index (PPI). Last month, a surprise uptick in the PPI month over month he

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