Shoppers might see high oil prices in gas, groceries
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NEW YORK -- Already feeling pinched since the start of the Iran war, consumers are likely to feel more pain ahead as oil prices pushed past $100 a barrel Thursday amid renewed fighting and military strikes that have left global oil supplies stranded in the Middle East.
The elevated price marked a turn from lower oil prices enjoyed briefly when hostilities between the U.S. and Iran waned in June. Brent crude, the international standard, last reached $100 a barrel in May.
Companies that produce and sell fresh food, school supplies and anything that gets shipped using fuel reported cost impacts from an earlier spike in energy prices after the U.S. and Israel attacked Iran. They're likely to continue passing some of their increased expenses to consumers.
"Since everything relies on petroleum in our economy, for good or ill, if the cost of petroleum goes up, then everything else goes up as well," said Joe Adamski, a managing director at procurement services company ProcureAbility.
Here's how higher oil prices could put more strain on the finances of U.S. consumers.
Gasoline prices return to $4 or more
Volatility along the Strait of Hormuz and broader regional instability pushed up the price of crude oil, the main ingredient in gasoline, and could continue to make driving costlier during the second half of summer, according to motor club AAA.
The U.S. price for regular gasoline averaged $4.09 a gallon Thursday, 15 cents more than a week ago, and drivers in most states were paying $4 or more, according to AAA.
"Given the typical lag along the oil industry's supply chain, prices at the pump are poised to keep rising at least into next week," said Pavel Molchanov, an investment strategy analyst at investment bank Raymond James.
Molchanov, noted that futures prices for oil delivered later this year and next year were lower, suggesting prices could fall once military action ends.
For the most part, higher gasoline prices haven't stopped Americans from driving. Gasoline demand rose 1% to 8.9 million barrels per day last week, according to the U.S. Energy Information Administration.
Shoppers are paying more for groceries
Grocery prices generally rise with oil because farmers use diesel fuel to power equipment, while many food products are transported by trucks that require fuel.
"Oil at $100 doesn't make food prices jump right away, but it does put upward pressure across the food supply chains, especially for categories that depend heavily on trucking, cold storage and packaging," said Miguel Gomez, a Cornell University professor who directs the school's Food Industry Management Program. Fresh produce and dairy could feel a larger impact because they require refrigeration during delivery.
Imported goods are also vulnerable to higher shipping costs, Gomez said. "Things like olive oil that we produce very little here and are coming from mostly from Europe are going to be up."
Grocery chain Albertsons on Thursday lowered its 2026 fiscal outlook, citing pressure on its core grocery business and a pullback in consumer spending.