Fuel prices are the main source of concern. Around two-thirds of respondents expect gasoline prices to be higher in a year, with the average expected increase at nearly 50 cents per gallon. For households, this means a risk of higher everyday costs, while for the broader economy it raises the possibility of weaker consumer spending in the coming months. Although retail sales remain relatively solid, a further increase in energy prices could limit Americans’ willingness to spend.
The Strait of Hormuz is disrupting the oil market
Pressure on fuel prices is directly linked to the tense situation in the oil market. According to Goldman Sachs, oil production in Gulf countries is currently 14.5 million barrels per day lower than before the war, representing a 57% decline in regional output. The main problem remains the near-total halt in traffic through the Strait of Hormuz, one of the world’s most important oil transport routes.
The disruption of this strategic passage is significantly reducing supply and keeping tension elevated in the global energy market. Goldman Sachs analysts estimate that even a full and safe reopening of the strait, combined with no further attacks, would not lead to an immediate return of production to previous levels. Restoring output could take several months, and the longer the disruption continues, the slower the normalization process may become.
Brent crude trades near USD 105 per barrel
Brent crude prices are rising for a fifth consecutive day and are heading for a weekly gain of around 17%. On Friday, Brent was trading near USD 105 per barrel, compared with less than USD 73 before the outbreak of the war. Although Brent remains below the conflict-period peak of nearly USD 120 per barrel, current levels still represent strong cost pressure for both consumers and businesses.