Remember when gas prices spiked and you thought, "Well, at least groceries are still okay"? That grace period is ending. The sharp rise in oil prices triggered by the war in Iran is no longer just a problem at the pump; it's beginning to filter through to the grocery shelves. Economists are now warning that the worst of the food inflation impact is still ahead of us.

Food prices were already creeping up. The price of food at home was 3% higher in February than a year earlier, according to the Consumer Price Index. And more people are noticing: the share of Americans reporting higher-than-expected grocery prices jumped to 48% in March from 46% in February, according to Morning Consult polling. That number is about to get a lot worse.

The Energy Shock Is Hitting Food From Multiple Directions

Here's how it works. The immediate pressure is coming from transportation costs—the expense of moving goods from farms and warehouses to your local store. When diesel fuel gets more expensive, so does everything on the truck. But there's a second, slower-moving wave building.

A significant volume of the world's critical fertilizer also transits the Strait of Hormuz. If that route gets disrupted or becomes more expensive to insure and ship through, the cost of growing food goes up. That increase takes longer to reach the grocery shelf—it has to work its way through the next planting and harvest cycle—but it's coming, depending on how long the conflict lasts.

Gas prices are already drawing most of the attention. Some 55% of Americans reported higher-than-expected prices at the pump in March, up sharply from 38% in February, Morning Consult found. And here's the kicker: Americans spend roughly 10% of their disposable income on food. That's twice what they spend on gasoline. So when food prices move, it hits household budgets much harder.

Broader Economic Warning Signs Are Flashing Red

The economic damage from this extends well beyond your checkout total. The International Monetary Fund warned that the effective closure of the Strait of Hormuz, which handles 25% to 30% of global oil supply, is acting as a "large, sudden tax on income" for fuel-importing economies. Their summary was grim: "All roads lead to higher prices and slower growth."

The projections are getting revised upward in a hurry. The OECD now projects U.S. headline inflation will rise from 2.6% in 2025 to 4.2% in 2026, driven largely by energy prices running roughly 40% above what was forecast just in December. In response, the Federal Reserve is expected to hold interest rates steady through 2026 and into 2027, caught between fighting inflation and not choking off growth.

Former White House official Anthony Scaramucci pointed to a dangerous cocktail of factors: tariffs, this new energy shock, and weakening consumer confidence. He argues this convergence is pushing the economy toward 1970s-style stagflation—that awful mix of high inflation and stagnant growth. His advice was succinct: "Brace yourself for a correction."

So, the next time you're filling up your tank and wincing at the total, just remember: that's only the first bill. The second, larger one is waiting for you in the cereal aisle.