HOUSTON, Texas (KTRK) — The war in Iran is approaching the two-week mark.
Since the war began, the price of oil has increased by over 30%.
Oil markets are suffering from supply flow issues due to the blockade of the Strait of Hormuz.
The average price of diesel in Houston is $4.40, which was $3.62 one week ago, according to AAA.
Member countries of the International Energy Agency have agreed to release 400 million barrels of oil from their strategic oil reserves.
The concern from financial markets and energy experts is that the higher diesel price will lead to higher goods prices, as many trucks use that fuel.
“It translates to refined fuel prices, which is what truckers use to put everything onto the store shelves,” University of Southern California Professor Shon Hiatt, Ph.D., said. “The worry is that if this continues longer, we are going to start seeing the prices show up in goods on the shelves.”
Food is likely to be impacted the most by rising fuel prices, according to Hiatt.
“We will see an impact on food prices shortly, probably around 10 or 15% in the next few weeks,” Hiatt said.
In the most recent Consumer Price Index report, food prices rose 0.4% in February. The data was compiled before the war in Iran began.
“Best case scenario: this thing ends soon. Worst case is, if we go for eight weeks or more, we will see triple-digit petroleum across the world and, because of the lag time, the price increases on the shelves for food,” Hiatt said.
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