Rising oil prices tied to Strait of Hormuz disruptions are expected to ripple through nearly every sector of the global economy.
By yourNEWS Media Newsroom
Rising oil prices linked to the ongoing conflict with Iran are expected to extend far beyond gasoline, increasing costs across food production, manufacturing, and technology supply chains as global energy markets react to uncertainty surrounding the Strait of Hormuz.
President Donald Trump said Wednesday that the conflict with Iran will come to an end soon, but markets showed little confidence that disruptions to energy flows in the Middle East would be resolved quickly.
By Thursday afternoon, West Texas Intermediate crude, the U.S. benchmark, had surged to more than $112 per barrel, according to oil price data, representing an increase of nearly 12% since Trump’s address. Brent crude, the international benchmark, also rose sharply, climbing above $107 per barrel.
The price movements reflect expectations that access to the Strait of Hormuz—through which roughly 20% of the world’s oil supply passes—will remain constrained. As outlined in a Just the News report, the disruption is likely to impact nearly every consumer product due to the central role oil and natural gas play in global supply chains.
In remarks addressing the situation, Trump emphasized domestic production capacity. “We produce more oil and gas than Saudi Arabia and Russia combined. And we’re in great shape for the future. The U.S. imports almost no oil through the Hormuz Strait and won’t be taking any in the future. We don’t need it,” he said.
Despite limited direct reliance on Middle Eastern oil, U.S. consumers remain exposed to global pricing pressures. Energy markets operate internationally, meaning supply constraints in one region can elevate costs worldwide.
Energy consumption data further illustrates the challenge. While renewable sources such as wind and solar account for about 15% of global electricity generation, electricity represents only a portion of total energy use. Industrial processes and transportation—key components of global supply chains—remain heavily dependent on fossil fuels.
In addition to powering production and logistics, oil and natural gas are integral to manufacturing. According to a U.S. Department of Energy infographic, a wide range of everyday goods are derived from petroleum-based materials, extending the economic impact of rising oil prices well beyond fuel costs.
Gasoline prices have already responded. The national average reached $4.08 per gallon Thursday, according to AAA data, more than $1 higher than levels recorded at the start of the conflict. Diesel prices climbed to $5.51 per gallon, approaching the record high of $5.81 set in June 2022.
Diesel plays a central role in economic activity. It is identified by the U.S. Energy Information Administration as the primary fuel for industrial transportation, powering freight trucks, farm equipment, public transit, and military vehicles.
Federal Reserve Chair Jerome Powell noted the broader implications of rising diesel costs during a press briefing. “I think it’s a more general concern than that. It’s diesel prices because that’s transportation of food and things like that. There are just lots of ways that oil and derivatives of oil get into the production and transportation of many, many things,” Powell said, according to a Federal Reserve transcript.
The agricultural sector is facing additional pressure from rising fertilizer costs. Nitrogen-based fertilizers are produced using natural gas through the Haber-Bosch process, converting gas into ammonia and then into urea and related compounds.
Supply disruptions in the Middle East are significant. According to the Energy Policy Research Foundation, nearly half of global urea exports and roughly 30% of ammonia exports transit through the Strait of Hormuz. With shipments constrained, fertilizer supplies have tightened, increasing input costs for farmers.
Middle Eastern producers generated approximately 10 million metric tons of ammonia-based fertilizers in 2023, much of which is now effectively stalled. Analysts warn that combined increases in diesel and fertilizer costs could reduce farm profitability, contributing to higher food prices. Additional reporting suggests these pressures are likely to drive food costs higher in the months ahead.
Manufacturing sectors are also affected, particularly plastics and electronics. Petrochemical feedstocks such as ethane and naphtha, derived from natural gas and crude oil, have risen in cost, increasing production expenses for materials used in packaging, automotive components, and consumer goods.
Approximately $20 billion to $25 billion in petrochemical products move annually through the Strait of Hormuz, according to a Reuters report. In 2025, more than 40% of global polyethylene production originated in the Middle East, underscoring the region’s importance to global plastics supply.
Helium supplies have also been disrupted. Produced as a byproduct of natural gas extraction, helium is critical for semiconductor manufacturing, fiber optics, medical imaging, and aerospace applications. The Energy Policy Research Foundation reports that Qatar accounts for approximately 35% of global helium production, second only to the United States.
With Qatari exports constrained, helium prices have already doubled, with further increases expected. Demand for helium continues to rise due to expansion in semiconductor production, supported in part by federal initiatives such as the CHIPS and Science Act, and increasing demand tied to artificial intelligence technologies.
Analysts indicate that no sector is insulated from the effects of rising energy costs. Because oil and natural gas underpin both energy systems and material production, disruptions in supply can cascade across industries.
The extent of the economic impact will depend largely on the duration of the conflict and whether access to the Strait of Hormuz is restored. Until then, rising costs across fuel, food, manufacturing, and technology sectors are expected to persist.
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