Stock markets worldwide roiled over the past month, bouncing up and down as news from the war in Iran rolled in. Many of the media reports were about commercial ships unable to pass through the Strait of Hormuz, as we have extensively reported on. But now, with the conflict over a month old, ripple effects are starting to be felt worldwide. In this article, we will showcase some of the effects of the war on supply chains affecting the end consumer.
Amazon increasing fees with fuel surcharges
Yesterday, Amazon announced a new fuel surcharge that will be passed onto Amazon sellers who use Amazon for their order fulfillment. In an email sent to every Amazon seller, Amazon outlined “temporary surcharges” that include a 3.5% fuel and logistics-related surcharge. According to Amazon, this fee will be added to the current fulfillment fees charged for units sold across Amazon.
According to Amazon, the surcharge will be charged to Amazon sellers beginning April 17th, a little less than two weeks away. Then, on May 2nd, the fee will also apply to the Multi-Channel Fulfillment service, which is for orders received from other websites but fulfilled by Amazon.
Although the fee is noted by Amazon to be about $0.17 per unit, very large sellers will likely see fees pile up, and it is likely these fees will be passed to consumers in the form of higher prices or more limited availability of certain goods if not profitable at scale.
Airline disruptions mean higher airfare prices
Since almost the beginning of the Iran war, airlines have been in the news due to long security lines. However, while that received the most attention, a crisis was brewing for airlines as they faced ever-higher fuel prices.
Now, airfares for even the simplest domestic flights has started increasing over the past few weeks. If oil prices continue to rise, so will jet fuel. Airlines have started considering cancellations of a wide swathe of their flights on certain routes for the upcoming months, as they have determined that these routes are not profitable with much-higher fuel prices.
If fuel prices come close to exceeding $200 per barrel for crude oil, American consumers may find themselves priced out of flights ahead of the 2026 summer season.
Stranded containers mean inventory could begin to deplete, depending on outcome
Small businesses across the U.S. are beginning to really feel the ripple effects of the Iran War. With over a month since the conflict began, supply chains are becoming more strained the longer the conflict drags on.
Everything from broad appeal to niche industries are being affected. For example, an article this week in the Associated Press spotlighted the fact that America is the largest exporter of pistachios, but U.S. pistachio farmers are seeing their exports stranded on container ships overseas. One farmer estimated $5 million in pistachio inventory stranded en route to the Middle East. Consumers will likely feel higher pistachio prices in the future.
In another example, fertilizer is being mentioned again and again as a major commodity affected by the Iran war. The Middle East is one of the largest exporters of fertilizer in the world, so any disruption there is affecting fertilizer exports to the U.S. and other countries. This will likely become an issue as the summer nears, with prices for the inventory being brought into the U.S. rising. But farmers and landscapers will have to charge more, and those costs will be passed to consumers, especially if businesses feel sharp increases.
The bottom line
The longer the Iran war drags on, the more American and global end consumers are going to feel higher prices, reduced product availability, and more disruptions with nearly every supply chain. In a globalized world, what happens abroad, thousands of miles away, has an impact at home. This impact affects everything from the local level to the nationwide level, and consumers should plan accordingly. Even if the war comes to a swift end, higher prices and disruptions are likely to continue for a longer period of time.
