$100 Oil Could Raise Gas, Grocery and Back-to-School Prices/ Newslooks/ WASHINGTON/ J. Mansour/ Consumers could face higher prices for gasoline, groceries, school supplies, shipping and flights after Brent crude moved above $100 per barrel. Businesses are paying more for fuel, freight, refrigeration and petroleum-based materials, with some of those expenses being passed to shoppers. The impact could persist even if oil prices retreat because consumer prices often fall more slowly than business costs.
Quick Look
- Brent crude moved above $100 per barrel amid renewed U.S.-Iran fighting.
- Regular gasoline reached a national average of $4.09 per gallon.
- Pump prices increased 15 cents in one week.
- Most states now have average gasoline prices of at least $4.
- Grocery prices face pressure from farming, trucking, refrigeration and packaging costs.
- Fresh produce, dairy products and imported foods may be particularly affected.
- UPS, FedEx and other carriers have added fuel surcharges and fees.
- Diesel prices in the second quarter were 51% higher than early in the year.
- Jet fuel prices increased 90% from a year earlier.
- Petroleum-based footwear materials reportedly rose as much as 25%.
- Finished footwear could become approximately 5% more expensive.
- Airlines have increased fares and fees while reducing some flights.
- Retailers say shoppers are consolidating trips and prioritizing essential purchases.
Deep Look
$100 Oil Threatens Further Consumer Price Increases
NEW YORK — Consumers already facing higher costs since the Iran war began may encounter additional price increases after Brent crude surpassed $100 per barrel Thursday.
Renewed fighting and military strikes have left substantial oil supplies stranded in the Middle East, disrupting energy markets and increasing transportation expenses.
Oil prices briefly declined when U.S.-Iran hostilities eased in June. Brent last traded at $100 per barrel in May before returning to that level Thursday.
Companies producing and selling food, school supplies and other transported goods previously reported higher expenses following the initial oil-price surge. Many are expected to pass at least part of those costs to consumers.
“In general, once you have an increase in costs, businesses are fast in increasing the price,” said Miguel Gomez, director of Cornell University’s Food Industry Management Program. “It takes more time to lower prices when the costs go down.”
Gasoline Reaches $4.09 per Gallon
Crude oil is the main ingredient used to manufacture gasoline, making pump prices one of the fastest ways consumers experience higher oil costs.
The national average for regular gasoline reached $4.09 per gallon Thursday, according to AAA. That represented a 15-cent increase from the previous week.
Drivers in most states were paying an average of at least $4 per gallon.
Volatility around the Strait of Hormuz and continued regional instability could make driving more expensive during the second half of the summer.
“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 Raymond James.
Oil futures for delivery later in 2026 and in 2027 remained lower, however, suggesting prices could retreat if military operations end.
Americans Continue Driving Despite Costs
Higher prices have not yet caused a broad decline in American driving.
U.S. gasoline demand rose 1% during the previous week to 8.9 million barrels per day, according to the Energy Information Administration.
Pressure could continue because fewer refineries are available to turn crude oil into gasoline, diesel and other fuels.
Some Middle Eastern refineries have been damaged during the conflict, while Ukrainian attacks have reduced capacity at Russian facilities.
Grocery Supply Chains Face Higher Expenses
Food prices often rise alongside oil because farmers use diesel-powered equipment and trucks transport products from farms and factories to stores.
“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,” Gomez said.
Fresh produce and dairy products could be especially vulnerable because they require refrigerated storage and transportation.
Imported foods are also exposed to rising ocean freight expenses.
“Things like olive oil that we produce very little here and are coming from mostly from Europe are going to be up,” Gomez said.
Albertsons Lowers Its Financial Outlook
Albertsons reduced its fiscal 2026 outlook Thursday.
The grocery chain cited pressure on its main food-retail business and consumers’ growing reluctance to spend.
Retailers may absorb some cost increases to remain competitive, but prolonged energy inflation makes it more likely that shoppers will eventually pay more.
Freight Costs Affect Almost Every Product
Higher fuel expenses for trucks, ships and aircraft can become embedded in the price of nearly every transported product.
UPS, FedEx and other shipping companies introduced fuel surcharges and additional fees as energy prices increased.
Truckload pricing reached its highest level in four years because of expensive fuel and limited freight capacity, according to a July 14 AFS Logistics and TD Cowen Freight Index.
AFS Logistics CEO Andy Dyer said second-quarter diesel prices were approximately 51% higher than in January and February. Jet fuel prices were 90% higher than a year earlier.
“Beyond the direct impact of higher freight bills paid by shippers, these price movements also have second-order effects that squeeze rates higher,” Dyer said.
“Smaller truckload carriers working on tight margins may park trucks and wait for fuel prices to revert to more palatable levels before returning to operation.”
A reduction in available trucks could further increase shipping rates by limiting freight capacity.
Rural Consumers Become More Cautious
Tractor Supply Co. lowered its annual sales forecast Thursday, partly because higher fuel prices reduced customer spending during its spring season.
The company’s rural customers often travel significant distances and commonly use pickup trucks, including diesel-powered models.
“Our customers often drive longer distances to shop frequently in pickup trucks, many of which are diesel-powered, making them especially sensitive to higher fuel costs,” CEO Hal Lawton told analysts.
Customers continued spending on animals, farms, pets and property maintenance, but Lawton described their shopping as “more deliberate.”
They were combining trips, emphasizing necessary purchases and reducing discretionary spending.
Back-to-School Footwear Could Cost More
Rising freight, tariff and material costs could affect prices during the back-to-school shopping season.
The Footwear Distributors and Retailers of America said some members reported price increases of 25% for petroleum-based materials used to manufacture shoes.
Those higher input costs could translate into an approximately 5% increase in finished footwear prices, according to trade group President and CEO Matt Priest.
Footwear companies have also accelerated imports to build inventories before Trump’s new tariffs take effect. That rush has added pressure to freight capacity.
“Container rates are spiking right now,” Priest said.
Air Travelers Face Higher Fares and Fewer Options
Airlines have responded to rising jet fuel costs by increasing ticket prices and add-on fees.
Some carriers have also reduced routes or flight frequencies that are no longer profitable at higher fuel prices.
Those measures can protect airline margins, but they leave passengers paying more and may reduce travel options in smaller or less competitive markets.
American Airlines Profit Declines
American Airlines reported a sharp decline in second-quarter net income Thursday despite record revenue and strong spring travel demand.
Higher ticket prices offset almost half of the carrier’s increased fuel bill, but that was not enough to prevent American from lowering its full-year financial forecast.
Demand for jet fuel remained strong. Consumption during the previous four weeks was 9% higher than during the same period a year earlier, according to the EIA.
The combination of sustained demand and constrained supply means consumers could continue experiencing higher transportation and product costs until oil markets stabilize.
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