If That Grocery Store Receipt Was Already Making Your Eyes Water … Just Wait

As Americans recoil from price tags at their local supermarket, a meteoric rise in diesel prices threatens to make their checkout total even more shocking.

Pressure on global petroleum markets is increasingly reaching American consumers as conflicts across the Middle East threaten two critical oil-shipping chokepoints, the Strait of Hormuz and Bab al-Mandab, while attacks have also damaged Saudi Arabia’s key route for bypassing Hormuz. The turmoil, which includes the Iran war launched Feb. 28, has driven diesel prices to a nationwide record of $6.00 per gallon.

“Diesel is one of trucking’s largest operating expenses, so an increase of this magnitude creates immediate pressure on motor carriers, who run on tight margins,” American Trucking Association chief advocacy and public affairs officer, Henry Hanscom, told the Daily Caller News Foundation. “It also tells us something about the broader economy. When families spend more at the pump, they have less to spend elsewhere, and that can translate into weaker demand for the goods trucks move,”

High diesel prices mean Americans can end up paying more for groceries, fertilizer and other goods moved by the trucking industry, even if they never personally fill up a diesel-powered vehicle, according to an April American Enterprise Institute analysis in April.

Food prices have also continued to climb, rising 2.7% from a year earlier in August, while grocery prices climbed 2.2%, fruits and vegetables jumped 3.2% and nonalcoholic beverages rose 3.7%, according to Bureau of Labor Statistics data.

“The 0.7% increase in food-at-home prices in April was most likely due to higher energy prices occurring around the start of the Iran conflict. Since that time, all signs of which I am aware have pointed to retailers and manufacturers constraining prices and potentially absorbing losses or seeing reduced margins,” Richard Volpe, agricultural economics professor at Cal Poly, told the DCNF. “Given that most retailers operate on thin profit margins to begin with (1-2%), it would surprise me not to see food price inflation tick up in the next couple of CPI releases as the high energy prices, driven mostly by crude oil and diesel, increase operating costs at all stages of the supply chain.”

“Most of the important Producer Price Index (PPI) numbers, which measure upstream prices, have been pushing higher year to date with little retail price movement. Given the competitive food environment and low consumer sentiment, most food companies are probably hoping to ride this wave of higher energy costs out without increasing their prices,” Volpe said.

Diesel stood at roughly $3.72 per gallon before the Iran war began in February, meaning prices have risen by roughly 60% in a little more than six months, according to the Bureau of Transportation statistics.

The surge follows months of turmoil across global energy markets as the Iran War threatens shipping through the Strait of Hormuz while Houthi attacks have disrupted traffic around the Red Sea and Bab al-Mandab, putting two of the Middle East’s most important oil shipping corridors under pressure.