Oil Shock Hits Fragile Economy Amid Rising Tensions

Kuala Lumpur — The U.S. economy is under pressure as global oil prices surge, affecting inflation and slowing growth, according to recent reports.

Official data show that Q4 2025 GDP growth was only 0.7%, significantly lower than earlier estimates. Slower consumer spending has also contributed to the economic slowdown.

The spike in oil prices is largely due to geopolitical tensions in the Middle East, including conflicts involving the U.S., Israel, and Iran. Higher energy costs are pushing up gasoline prices, transportation, and flight costs, increasing inflationary pressure on consumers.

Economists warn that persistent high oil prices could make it more difficult for the Federal Reserve to cut interest rates while keeping inflation under control.

Despite these challenges, many experts do not expect an immediate recession. The technology sector, relatively stable stock markets, and tax returns continue to support economic activity.