Iran war starts pinching US; gas prices, transport costs surge

The war against Iran has started to impact Americans with Amazon announcing a fuel surcharge for its ecommerce deliveries and some airlines hiking fees for checkedin baggage to offset higher fuel costsThe average price of petrol in the US has increased to USD 409 a gallon on Friday up more than one dollar from just before the war and the highest level since August 2022The cost of diesel has risen sharply from USD 364 per gallon a year ago to USD 553 per gallon on Friday according to data maintained by the American Automobile Association AAA Diesel is widely used in farming construction and transportation besides other industriesEcommerce giant Amazon also said that beginning April 17 it plans to add a 35 per cent fuel surcharge on thirdparty sellersThe US Postal Service on Wednesday said it is seeking to impose a temporary 8 per cent fuel surcharge for package and express mail deliveries to deal with rising transportation costsIf approved by the Postal Regulatory Commission the surcharge would take effect April 26 and remain in place until January 17 2027 the Postal Service said in a notice on its websiteIf the war against Iran stretches longer it will also lead to supply chain disruptions in the USI dont think the US will avoid it These are global markets Rachel Ziemba a New Yorkbased analyst who advises corporations on geopolitical risk was quoted by The Washington Post as sayingExperts even a week ago were worried Now they are more worried she saidIf transportation costs start rising its going to bleed through in other prices Austan Goolsbee president of the Federal Reserve Bank of Chicago was quoted as saying by CBSSo I think its in the near term but not immediate that you would start to see that weighing down of the consumer they would just get sticker shock People were already highly concerned about affordability and the cost of living and this would just be piling onto it he saidBlocking the Hormuz Strait has already cost the global economy hundreds of millions of barrels of oil with the effects felt on a rolling basis corresponding to travel time from the Persian Gulf The Washington Post reported quoting from a recent client note from JPMorgans commodities specialistsAsia was first to feel the loss of Gulf oil shipments where governments have ordered rationing and conservation measures Europe is likely to suffer physical shortages by midApril as the last vessels loaded with oil before the war arrive at continental portsSince it takes 35 to 45 days to reach US ports from the Strait the United States will be the last market to sufferPrices will rise but shortages of refined products starting in late April or May will probably be confined to California which is physically isolated from the nations fuel supply system the JPMorgan report saidThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever