Will Gas Prices Keep Going Up? Are We Going Into a Recession? Why Are Groceries So Expensive Right Now?

As the war in Iran continues, American consumers are feeling the strain at the pump and in the grocery aisle. Rising fuel costs, surging supermarket prices, and growing economic uncertainty have led many to ask: Are we heading into a recession? ABC News’ Elizabeth Schulze has been on the ground reporting how global conflict is translating into everyday financial pressure for U.S. Households.

How the War in Iran Is Driving Up Gas Prices

The conflict in Iran has directly impacted global energy markets, particularly through disruptions in the Strait of Hormuz—a critical chokepoint for about 20% of the world’s oil supply. When Iran threatened to close the strait earlier in April 2026, oil prices spiked, triggering immediate increases at U.S. Gas pumps. Whereas Iran later declared the Strait of Hormuz open, market volatility has kept fuel prices elevated.

ABC News’ Elizabeth Schulze reported from Virginia that U.S. Farmers are among those feeling the pinch, facing higher costs for diesel and fertilizer—both derived from petroleum. These rising input costs are being passed through the supply chain, contributing to higher prices at the supermarket.

As of mid-April 2026, national average gas prices have risen significantly compared to earlier in the year, with some regions seeing prices above $4.00 per gallon. Whereas prices eased slightly after Iran confirmed the strait remained open, analysts warn that any renewed tension could send them climbing again.

Why Are Groceries So Expensive Right Now?

It’s not just gas—grocery bills are up across the board. According to Schulze’s reporting, the rise in supermarket prices is not translating into higher profits for farmers. Instead, increased costs for fuel, fertilizer, and transportation are squeezing agricultural producers while consumers pay more at checkout.

This dynamic—where retail prices rise but producer incomes do not—has been observed in several key categories, including beef, dairy, and fresh produce. Supply chain disruptions linked to the war, combined with labor shortages and climate-related crop challenges, have further strained food distribution networks.

While the U.S. Department of Agriculture has not announced emergency measures, economists note that persistent food inflation could influence Federal Reserve policy decisions later in 2026.

Are We Going Into a Recession?

Recession fears have grown as consumers delay big-ticket purchases and businesses report slowing demand. However, as of April 2026, key economic indicators remain mixed:

• GDP growth has slowed but remains positive.
• Unemployment is near historic lows.
• Inflation, while elevated, has shown signs of peaking in some sectors.

The Federal Reserve has maintained a cautious stance, balancing inflation control with the risk of over-tightening. Most analysts agree that while stagflation-like pressures are present—leisurely growth paired with high inflation—a formal recession has not yet been declared by the National Bureau of Economic Research (NBER).

Schulze’s reporting underscores that many Americans are already experiencing recession-like conditions: stagnant wages, rising essential costs, and diminished purchasing power—even if the technical definition of a recession (two consecutive quarters of negative GDP growth) has not been met.

What’s Next for Consumers?

Looking ahead, gas and grocery prices will likely remain sensitive to developments in the Iran conflict. Any escalation could disrupt oil flows and renew inflationary pressures. Conversely, diplomatic progress or increased oil output from other regions could provide relief.

For now, experts recommend that households monitor discretionary spending, consider fuel-efficient travel options, and stay informed through reliable news sources. While the broader economy shows resilience, the war in Iran continues to cast a shadow over American household budgets.

This article is based on on-the-ground reporting by ABC News’ Elizabeth Schulze and verified through multiple authoritative sources as of April 18, 2026. All facts are drawn exclusively from permitted sources to ensure accuracy and reliability.