High oil prices due to the Iran war weigh on everything from the gas pump to consumer goods

NEW YORK — Pain at the pump. Higher postal prices. Flights canceled, costlier airplane ticket prices and baggage fees. Everyday items such as soap and toothpaste getting more expensive.

Consumers are paying for the Iran war 's disruption of global energy production as the conflict enters its third month. Steeper gasoline, diesel and jet fuel prices are making driving and air travel more expensive.

Many companies warn there's more to come: the cost of fuel and of materials derived from petroleum could drive up food prices and for other household items.

Iran has closed the Strait of Hormuz to oil tankers, keeping them pent up in the Persian Gulf and away from customers worldwide, while a U.S. Navy blockade is preventing Iran from selling its own oil. Prices surged overnight on worries that the war will affect the flow of crude for a long time.

Here’s how the growing cost of oil and gas is impacting consumers.

As the cost of crude climbs, so do the prices of gasoline and other fuel that keep equipment, cars, buses, delivery trucks and airplanes running.

Across the U.S., gas prices are at their highest level since 2022. The national average hit $4.30 a gallon on Thursday, compared with $2.98 before the war started, according to AAA. That's a 44% increase since the U.S. and Israel attacked Iran on Feb. 28.

Steep diesel prices are making it more expensive to haul everyday goods. Diesel is now at an average of nearly $5.50 a gallon, up from $3.76 before the war, AAA says.

Shippers have started adding surcharges to cover the cost. The U.S. Postal Service implemented a temporary 8% charge on some of its services, including Priority Mail, to help blunt the impact of rising transportation costs. Amazon added a 3.5% fuel and logistics surcharge on third-party sellers using its platform to offset fuel prices as well.

Shoppers may see more sticker shock for clothing, cosmetics, furniture and other goods.

"Diesel’s the one that you want to watch out for for prices of consumer goods,” said Peter Zaleski, professor of economics at Villanova University.

After jumping to $209 a barrel in early April, the global price of jet fuel eased last week to around $179, still well above the roughly $99 at the end of February.

Fuel is one of the largest expenses for airlines. Its prices are pushing up airfares, baggage fees and add-on charges.

Major U.S. carriers including Delta, United, American and Southwest have raised checked baggage fees. United is expanding its “pay for what you want” model from economy to premium cabins, charging separately for options like seat selection. American is adding fees for seat assignments in basic economy, even for its elite-tier loyalty members.

Outside the U.S., carriers in Asia and Europe have added or raised fuel surcharges, in some cases tacking on hundreds of dollars to long-haul tickets.

Many airlines also have trimmed flight schedules, cut less profitable routes or reduced seat capacity. The Lufthansa Group has said it plans to cancel about 20,000 flights across its network over the next six months.

Procter & Gamble, the maker of such household products as Crest toothpaste, Tide detergent and Charmin toilet paper, warned last week the war would cause a $1 billion hit to profits during its next fiscal year. Many of P&G’s products and packaging are made of resin or other petroleum-based material, Andre Schulten, P&G’s chief financial officer, told reporters on April 24. He said the company may have to pass on costs to shoppers.

London-based Unilever, which makes everything from Dove soap to Hellmann's mayonnaise, plans to raise prices around 2% to 3% in “small doses,” CFO Srinivas Phatak said in an earnings call on Thursday.

Grocery prices have yet to be affected, according to government figures. But they are expected to rise with tightening supplies of fuel and fertilizer.

Fuel accounts for roughly 15% to 30% of the total cost of food, according to the Independent Grocers Alliance, a grouping of 7,500 global supermarkets. Fertilizer is also essential to farmers, and about 30% of the world’s fertilizer shipments typically pass through the Strait of Hormuz.

Ken Foster, a professor of agricultural economics at Purdue University, said there is typically a 3- to 6-month lag between an energy price shock and an increase in retail food prices. The lag can be up to a year for packaged foods with a longer shelf life.

The U.N. World Food Program estimates that 45 million additional people – the majority of whom live in Asia and Africa -- could tip into hunger if the war doesn’t ease by the middle of this year. That would bring the global total of people facing food insecurity to 363 million, the highest level on record.

“Delays and higher transport costs push up food prices, and families who spend 50% to 70% of their income on food are the first to go without,” Corinne Fleischer, the program’s supply chain director, said in a statement.

Associated Press writers Cathy Bussewitz and Anne D'Innocenzio in New York, Dee-Ann Durbin in Detroit and Rio Yamat in Las Vegas contributed to this report.

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