Summary of U.S. Consumer Sentiment Under Pressure from War and Rising Oil Prices

Author: Krzysztof Kamiński

Date: 24 April 2026

Overview

In April 2026, U.S. consumer sentiment plummeted to a record low of 49.8 points, the lowest since data collection began in 1978. This decline is attributed to rising inflation expectations, driven by the ongoing war with Iran and escalating oil prices, which have pushed Brent crude oil prices near USD 106 per barrel.

Key Findings

• The University of Michigan Consumer Sentiment Index fell from 53.3 in March to 49.8 in April.
• Concerns over the economic impact of the Iran conflict and rising energy costs have significantly affected consumer outlook.
• Inflation expectations have surged, with consumers anticipating a 4.7% increase in prices over the next year, up from 3.8% in March.
• Two-thirds of consumers expect gasoline prices to rise, with an average anticipated increase of nearly 50 cents per gallon.

Impact of Oil Market Disruptions

The oil market is under significant pressure due to the war, with Goldman Sachs reporting a 57% decline in oil production in Gulf countries. The Strait of Hormuz, a critical oil transport route, is experiencing near-total traffic halts, exacerbating supply issues and keeping oil prices elevated.

Brent crude prices have risen for five consecutive days, nearing USD 105 per barrel, compared to less than USD 73 before the conflict began. This increase poses risks of renewed inflation, particularly if higher energy costs influence transport and consumer goods prices.

Consumer Spending Risks

Despite solid retail sales, the combination of record-low consumer sentiment, rising inflation expectations, and increased fuel costs raises concerns about future consumer spending. The ongoing geopolitical instability and high energy prices could limit economic growth as households face tighter budgets.

The temporary ceasefire between the U.S. and Iran has reduced immediate escalation risks, but uncertainty remains high, particularly regarding the Strait of Hormuz. The situation presents a complex challenge for the U.S. economy, balancing the need for consumer support against inflationary pressures.

Conclusion

The article highlights the precarious state of U.S. consumer sentiment amid geopolitical tensions and rising energy costs. As inflation expectations rise and consumer confidence wanes, the potential for reduced spending could pose significant challenges for economic growth in the coming months.