So, when an acquaintance matter-of-factly said the current hostilities with Iran do not affect his life, I thought, ‘Huh, that’s as wrong as wrong can be.’ War has already had an impact across the country and in ways that are being felt in Ohio and in our region.
Sometimes the repercussions are obvious, but in many instances they’re not.
We see the impact at the gas pump, where prices have already risen significantly. On March 2, one gallon of gas in the Dayton area averaged about $2.68, according to AAA. One week later, the price increased by more than 25%, to about $3.46. As long as Iran continues to restrict access to the Strait of Hormuz, gas prices won’t ease since 20% of the world’s oil comes through the Strait. CNBC said the war has caused the largest supply disruption ever.
History shows the dangers of prolonged interruptions. When Russia invaded Ukraine, crude prices spiked because markets feared a disruption in Russian oil exports, and gas at the pump jumped to $5 a gallon. Russia was exporting about 3 million barrels a day, CNN reported, far less than the 20 million barrels that come through the Strait daily.
Here’s what you might not see. Oil prices have an impact on everyday goods.
Trucks transport 83% of agricultural products and 92% of fruit, nuts, vegetables, and dairy, according to the U.S. Department of Agriculture. Companies that transport food (and their shareholders) won’t eat the additional costs, at least not in the long term. The USGA found a direct correlation between increased diesel prices and the increase of certain commodities. The increase in gas and food also results in behavioral changes in consumers who cut back on other purchases.
Crude oil is one component for making plastic, so those costs increase, too. That includes the plastic that wraps many of the foods we buy at the supermarket, disposable forks, knives, and spoons, and more.
Think of all the plastics used in medical professions, like during knee or hip replacement surgery. Nail and hair salons, restaurants, manufacturers, and many more operations use plastics. They all incur additional costs.
The summer barbecue will also become more expensive. Propane prices surged about 30% in the first four trading days after the war began, according to Discovery Alert, which follows energy prices. With ground beef at a record $6.73 per pound, and a 10-pack of hot dogs at $5.52 (another high), that cookout gets expensive, fast.
And there’s another little-discussed issue. Five nations in the Middle East produce about a third of the world’s nitrogen-rich fertilizer, which is critical to plant growth. Shrinking the supply puts more financial strain on farmers.
You could pay more for that new suit, or summer outfit, or pair of slacks. Most of the clothes we wear, including polyester and nylon, are made from fossil fuels. For example, it takes 1.5 cups of crude oil to make a synthetic t-shirt, according to the consumer advocacy group PIRG.
President Trump has said that the war will be over “soon,” whatever that means. But even if he ends American involvement, that doesn’t mean Israel will stand down, or that Iran will open the Strait.
So yes, war impacts everyone because the global economy makes us interdependent on one another.
Look beyond the pump because everything we touch in our daily lives is being affected by a conflict that seems distant but isn’t, not when it comes to the wallet.
Ray Marcano’s column appears on these pages each Sunday. He can be reached at raymarcanoddn@gmail.com
