Global inflation has been climbing back for months. India’s June print — 4.38%, up from 3.93% in May and above every forecast — isn’t a shock out of nowhere. It’s the sharpest data point yet in a trend that started well before this week’s Gulf escalation, and it shows how bad this could get elsewhere if the conflict runs on.
Look at the pattern first. India’s inflation has climbed steadily since the start of the year: 2.75% in January, 3.40% in March, now 4.38%. Eurozone inflation hit 3.2% in May, its highest level since September 2023 and comfortably above the European Central Bank’s target, before easing slightly to 2.8% in June.
The OECD revised its 2026 G20 inflation forecast up to 4.0% from an earlier 2.8%, directly citing disruption to shipping through the Strait of Hormuz. Nobody serious has been declaring victory over inflation this year. What’s changed is the pace, and India just handed everyone the clearest read yet on how fast that pace can move.
The reason India got there first comes down to exposure, not fragility. The country imports 85% of its fuel and routes half its crude, most of its liquefied petroleum gas and the bulk of its natural gas through the Strait of Hormuz, an active conflict zone right now.
Oil price shocks reach India within weeks, showing up in diesel prices, trucking costs and, eventually, food prices as those costs move through the supply chain.
Most developed economies have more buffer: strategic reserves, diversified suppliers and currencies that absorb shocks better. But buffer buys time, not immunity.
The eurozone’s own energy inflation, still running at 8.7% in June even after cooling from May’s 10.8%, shows the same mechanism already operating in a wealthier, better-insulated economy.
Brent crude is up more than 3% since the weekend, pushing toward $78 a barrel from a recent low near $70. Fighting resumed last week after a brief ceasefire in June. Every forecast built around that ceasefire holding is now out of date — and plenty were, including some of the more optimistic disinflation calls coming out of Europe in early summer.
Think of it as a transmission speed test. Every economy tied to Gulf energy is going to feel this shock eventually. The difference is how fast it arrives and how hard it lands, and that comes down almost entirely to import dependence.
India, with 85% fuel-import reliance and roughly half its crude moving through Hormuz specifically, sits near the top of that list — which is exactly why its consumer price index moved first and hardest.
Economies with more diversified energy sourcing or larger reserves will see the same pressure build more slowly, but the direction is the same everywhere, since the fuel has to come from somewhere.
India’s central bank has already conceded the point, forecasting 5.1% inflation for the coming fiscal year while flagging softer growth. That’s a formal admission that the soft-landing assumption baked into earlier forecasts didn’t survive contact with this conflict.
Most other central banks haven’t made that admission yet, but the eurozone data is already moving in the same direction: Energy costs did comparable damage there in May, just from a lower starting base and with more capacity to absorb it.
This matters for how investors should read every other inflation print landing over the next month.
Emerging markets with heavy energy dependence — Turkey, the Philippines, much of East Africa — are exposed to the same mechanism India just demonstrated, and their currencies and bond markets will likely reprice faster than anything in the developed world.
India’s June data is a live template for what that repricing looks like before it spreads further. Watch which other emerging-market currencies move in the coming two weeks; that’s the clearest signal available for how contained this stays versus how far it travels.
None of this means panic is the right response. Supply shocks driven by geopolitics tend to fade once the underlying conflict resolves, and historically, Gulf conflicts have resolved faster than markets expect mid-crisis.
But the assumption that inflation was a solved problem heading into this summer was already wrong before India’s print landed; the eurozone numbers said as much in May. India just showed how quickly a resumed war turns a slow-moving trend into a sharp one for the most exposed economies first.
Everyone still pricing developed-market inflation as contained should treat this number as a potential preview of their own next print, not a footnote from a distant economy.
Nigel Green is CEO and founder of deVere Group.
