according to a study published Tuesday by the Federal Reserve Bank of Dallas.

The working paper examined several scenarios for the strait, through which 20% of global oil trade passes and which is effectively closed for five weeks. A one-quarter closure could increase March inflation by 5.2 percentage points year-on-year, although the effect would quickly fade, leaving fourth-quarter inflation elevated by 0.35 percentage points.

A three-quarter closure would push oil prices from the current $115 per barrel to $167 and increase fourth-quarter inflation by as much as 1.8 percentage points, the researchers found.

Annual inflation, measured by the personal consumption price index, was 2.8% in January. The Federal Reserve is targeting 2%.

Core inflation, which excludes food and energy prices, will rise by 0.18 percentage points in a one-quarter closure and by about 0.49 percentage points if the closure extends for three quarters. Core inflation was 3.1% in January.

The study found a limited impact on inflation expectations. One-year expectations could rise by a maximum of 0.8 percentage points, while 5- to 10-year expectations would increase by a maximum of 0.09 percentage points.

"There is little evidence that higher gasoline prices are transmitting to core inflation or that longer-term inflation expectations are becoming unmoored," the Dallas Fed researchers wrote.

The findings come as the Middle East conflict appeared on the brink of escalation on Tuesday after President Donald Trump called on Iran to open the Strait of Hormuz or face the destruction of its power plants and bridges.