Higher oil prices are about to hit more than just the gas pump

U.S. shoppers are being warned to prepare for rising costs, as a spike in global oil prices begins to ripple through everyday spending.

Since the outbreak of war in Iran, oil prices have surged more than 40%, driven in part by disruptions in the Strait of Hormuz — a key shipping route that typically carries about one-fifth of the world’s oil and natural gas. That jump is now making its way through the entire supply chain.

From international cargo ships to last-mile delivery vans, higher fuel costs are increasing the price of transporting goods. Economists say those added expenses won’t stay behind the scenes for long.

“All of those shifts are adding to costs, a portion of which will be passed along to consumers,” said Diane Swonk, chief economist at KPMG. Costs that aren’t passed on, she added, could lead to tighter profit margins and potential impacts on jobs.

The numbers are already climbing. A barrel of Brent crude — the global benchmark — rose to about $108 per barrel on Friday, up from roughly $70 before the conflict escalated in late February. Gas prices in the U.S. have followed suit, reaching a national average of $3.98 per gallon as of March 25 — nearly a dollar higher than a month earlier.

Economists expect broader inflation to follow. Rising gas prices are likely to push overall inflation higher in the coming months, while increased transportation costs could drive up prices on food and other everyday goods.

Businesses that rely on low-cost, high-volume sales — like discount retailers — are particularly vulnerable, as they have less room to absorb rising shipping costs without raising prices.

For online shoppers, the impact may show up in a different way. Rather than adding obvious delivery fees, retailers are more likely to increase the minimum purchase required for free shipping — a subtle shift that still pushes consumers to spend more.

Shipping costs themselves are rising quickly. Fuel surcharges have already jumped 17% in just three weeks, according to logistics data.

In the coming weeks, U.S. shoppers should brace for impact as higher oil prices continue to work their way through the economy, showing up not just at the gas pump but in grocery aisles, online carts, and everyday household expenses.