Following the conflict between the United States and Iran, oil prices have gone up as crude oil futures at one point topped $110.
The West Texas Intermediate crude oil futures, a benchmark for U.S. oil, fell by more than 15% to roughly $95, still significantly higher than where it stood at the beginning of 2026, according to IndexBox.
The recent cost-of-living adjustments (COLAs) have been 5.9% for 2022, 8.7% for 2023, 3.2% for 2024, 2.5% for 2025, and 2.8% for 2026.
Donald Trump announces that the U.S. will start to blockade ships trying to enter or leave the Strait of Hormuz, effective immediately. pic.twitter.com/Og7Er73FMF
— Pop Base (@PopBase) April 12, 2026
Amid the Iran war, high oil prices could influence the Social Security COLA for 2027. If energy prices contribute to higher CPI-W readings during the third quarter, the cost-of-living adjustment would be larger.
However, a major factor that could sustain higher prices is the ongoing geopolitical tension in the Middle East involving the U.S., Iran, Israel, and other countries.
The conflict has significantly driven up global oil prices, mainly through disruptions in the Strait of Hormuz, a critical chokepoint for about 20% of the world’s oil and gas supply.
Prices surged past $110 to $120 per barrel in March as Iran severely restricted the Strait of Hormuz, attacked regional energy infrastructure, and retaliated against US/Israeli strikes, according to JP Morgan.
🚨 VP JD Vance just warned Iran not to play games as he heads to Pakistan for high-stakes peace talks:
“If the Iranians negotiate in good faith, we’ll extend an open hand.
But if they try to PLAY us, they’ll find out our team isn’t very receptive.”pic.twitter.com/p41D2khSfF
— Gunther Eagleman™ (@GuntherEagleman) April 10, 2026
Currently, Brent is trading around $102 to $104 per barrel and WTI around $104 after the fragile ceasefire talks collapsed and the United States announced a naval blockade.
President Donald Trump ordered a U.S. naval blockade of Iranian ports and the Strait starting from Monday, April 13, aimed at preventing Iran from profiting while securing the route. This has renewed fears of prolonged disruption.
In an interview with Fox News, the POTUS said the effort will be a “complete blockade” and “all or none,” which means no ship will be allowed to pass until Iran relents.
Meanwhile, Iran has kept much of the Strait of Hormuz restricted and called the U.S. blockade “an act of piracy”.
Again drama starts
And it is always on weekend
JUST IN 🚨 Donald Trump has directed the US Navy to block all vessels entering or exiting the Strait of Hormuz, effective immediately
Tomorrow again gap down, followed by major volatility
— Vibhor Varshney (@nakulvibhor) April 12, 2026
Interestingly, limited tankers have passed recently, but a full reopening of the strait is currently uncertain.
Moreover, U.S. forces are moving to enforce navigation, raising escalation risks.
Amid this, U.S. national average gas prices rose to around $3.90 to $4 per gallon, according to The Guardian.
Vice President JD Vance said on Sunday, April 12, that the U.S. was unable to secure an Iranian agreement on key terms, despite extensive discussions.
“We leave with a very clear proposal. It is our final and best offer,” the Vice President said.
Meanwhile, according to Iranian media, Foreign Minister Seyed Abbas Araghchi said a phone call from Israeli Prime Minister Benjamin Netanyahu to JD Vance during the negotiations shifted the dynamics of the talks.
