Iran's Strait of Hormuz blockade is rippling through US fuel prices, plastics supply chains, and grocery costs

March 29, 2026 | Washington D.C.- Iran's blockade of the Strait of Hormuz — through which a quarter of global seaborne oil flows — is hitting American wallets hard. Gas prices have surpassed $8/gallon in parts of Los Angeles and average $5.83 in California. The disruption is also cutting off 30% of global seaborne LPG exports, raising costs for plastics, food packaging, and fertilizers. While the US produces its own LPG and is partially insulated, prolonged closure could trigger broader supply chain pain for everyday consumers.

The downstream effects are already making themselves known. Plastics manufacturers, food packaging companies, and fertilizer producers have all flagged rising input costs in recent weeks, warning that price increases could hit grocery shelves within 60 to 90 days if the conflict is not resolved. Airlines have imposed fuel surcharges on domestic and international routes. Trucking companies, which rely heavily on diesel derived from crude oil, are passing elevated costs directly to retailers — adding pressure to supply chains still recovering from earlier disruptions.

Geopolitically, the energy squeeze is reshaping alliances. China and India — two of the world's largest energy consumers — have both increased imports from Russia and alternative suppliers, further straining global logistics networks. Gulf states not directly involved in the conflict are seeing a windfall from elevated oil prices, while European nations are pushing hard for ceasefire negotiations to stabilize markets. Back home, the White House has released emergency reserves twice in the past month, but analysts say the impact has been limited. With no clear end to the conflict in sight, energy economists warn that $6/gallon national average gas prices could become the new normal through summer 2026.