As tensions in the Middle East continue to escalate, the effects are no longer confined to the conflict zone, they are beginning to show up in daily routine across economies. In the United States, rising fuel costs triggered by the war against Iran are now filtering into everyday life, quietly reshaping how businesses operate and how much consumers pay. What began as a geopolitical flashpoint is steadily turning into an economic pressure point, with transportation costs climbing and companies adjusting their pricing to keep up. Petrol prices have climbed significantly, reaching $4.09 per gallon on Friday, an increase of more than one dollar compared to levels seen before the conflict began, and the highest since August 2022. Diesel has seen an even steeper rise, jumping from $3.64 per gallon a year ago to $5.53 per gallon, according to figures from the American Automobile Association (AAA). The surge is particularly significant given diesel’s widespread use in sectors such as farming, construction and transportation, PTI reported. In response to these mounting costs, companies have begun passing on the burden. Amazon announced it will impose a 3.5% fuel surcharge on third-party sellers from April 17. Airlines, too, have started increasing fees for checked-in baggage to offset fuel-related expenses. The US Postal Service is also seeking to introduce a temporary surcharge. It said on Wednesday that it plans to apply an 8% fuel fee on package and express mail deliveries. The proposal, if approved by the Postal Regulatory Commission, would come into effect on April 26 and remain until January 17, 2027. The broader economic impact could deepen if the conflict persists, with supply chain pressures expected to build over time. “I don’t think the US will avoid it. These are global markets,” Rachel Ziemba, a New York-based analyst who advises corporations on geopolitical risk, was quoted by The Washington Post as saying. “Experts, even a week ago, were worried. Now they are more worried,” she said. Economists have also warned of a wider knock-on effect on prices. “If transportation costs start rising, it’s going to bleed through in other prices,” Austan Goolsbee, president of the Federal Reserve Bank of Chicago, was quoted as saying by CBS. “So I think it’s 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 said. At the centre of the disruption is the blockage of the Hormuz Strait, which has already removed hundreds of millions of barrels of oil from global supply, according to a JPMorgan client note cited by The Washington Post. The impact is being felt in phases, depending on shipping times from the Persian Gulf. Asian countries have been the first to face the shortfall, with governments introducing rationing and conservation steps. Europe is expected to encounter physical shortages by mid-April as the last shipments dispatched before the war arrive at its ports. The United States is likely to experience the effects later due to longer transit times of 35 to 45 days. While higher prices are expected nationwide, shortages of refined fuel products from late April or May are likely to remain limited to California, which is geographically isolated from the country’s broader fuel distribution network, the JPMorgan report said.

The Middle East war has pushed energy prices higher, affecting lives across the globe. As the crisis has crossed one month, oil prices have stayed beyond the $100 per barrel mark and ripples are visible across the globe. While some countries are encouraging measures to move beyond fuels, others are forced to raise prices, making everyday routine costlier. Residents in Hong Kong are contending with the highest petrol prices in the world, as global energy markets remain under strain and costs continue to climb. At roughly $15.6 per gallon, fuel in the city far exceeds prices seen elsewhere, even as motorists in the United States face their highest rates since 2022.The sharp rise in global oil prices follows escalating tensions involving oil-producing Gulf nations and the disruption of a crucial shipping corridor through the Strait of Hormuz. Over the past month, these developments have driven a surge in oil costs worldwide, placing added pressure on Asian economies that depend heavily on energy supplies routed through the region.The fuel price hike is not new for Hong Kong as the country had already been grappling with steep costs even before the latest crisis. Data from GlobalPetrolPrices.com shows the city has consistently ranked as the most expensive place for petrol, even prior to the conflict involving Iran, CNN reported.Although private vehicles are owned by only about 8.4% of the city’s 7.5 million residents, economists caution that the impact extends beyond motorists. Rising fuel costs are expected to push up logistics expenses, which could filter through to other parts of the economy and contribute to inflation.Authorities have sought to reassure the public on supply stability. Chief Executive John Lee had earlier voiced concern over rising oil prices and said the government would keep a close watch on movements in the market. Officials maintain that supply remains secure, with about 80% of Hong Kong’s oil products sourced from mainland China.“With the advantage of having strong support from the motherland, Hong Kong has been able to maintain a stable energy supply amid energy shortages in many regions and cities around the world,” a Wednesday government press release said as cited by CNN.At the consumer level, the price disparity with mainland China is becoming increasingly apparent. Reports suggest more drivers are crossing the border to refuel, where petrol can cost as little as one-third of Hong Kong prices.Hong Kong has long had relatively low car ownership levels among major cities, a trend shaped by high fuel prices, expensive parking and steep vehicle registration fees. The city’s extensive public transport network continues to serve as the primary mode of travel for most residents.Experts say a combination of high fuel duties and land costs continues to keep petrol prices elevated, reinforcing Hong Kong’s position at the top of global fuel price rankings.

Representative image (AI-generated)

Amid the ongoing Middle East crisis that has disrupted the global oil supply chain, Indian refiners have made their first purchase in seven years since 2019, according to Reuters.India had not received any cargo from Tehran since the US pressured it to halt crude imports, according to the petroleum ministry. This marks the latest development in a significant shift in sourcing strategy.Indian refiners have purchased Iranian oil amid the escalating conflict in West Asia that has disrupted supplies through the Strait of Hormuz. India, the world’s third-largest oil importer and consumer had not received a single cargo from Iran since May 2019 after US sanctions forced a halt to trade.However, recent disruptions linked to the ongoing US-Israel conflict have tightened global supplies, impacting India’s energy security.In a statement, the ministry said, “Amid Middle East supply disruptions, Indian refiners have secured their crude oil requirements, including from Iran; and there is no payment hurdle for Iranian crude imports.”The ministry further assured that India’s crude oil needs for the coming months remain fully secured.

No payment issues, supply fully secured: Government

Dismissing reports that an Iranian oil shipment meant for India was diverted to China due to payment-related hurdles, the government termed such claims “factually incorrect.”Clarifying the situation, the ministry said, “The news reports and social media posts of an Iranian crude cargo being diverted from Vadinar, India to China due to ‘payment issues’ are factually incorrect.”The ministry added that Indian companies enjoy full flexibility in sourcing crude.“India imports crude oil from 40-plus countries, with companies having full flexibility to source oil from different sources and geographies based on commercial considerations.”

Why India stopped buying Iranian oil?

Before sanctions were tightened in 2018, India was among the largest buyers of Iranian crude, importing both Iran Light and Iran Heavy grades due to refinery compatibility and favourable pricing terms.At its peak, Iranian crude accounted for around 11.5 per cent of India’s total imports. In 2018, India imported approximately 518,000 barrels per day of Iranian oil.However, imports declined to about 268,000 bpd between January and May 2019 during a sanctions waiver period, before dropping to zero after the United States ended exemptions and reimposed restrictions.Since then, India has diversified its sourcing basket, shifting to suppliers in the Middle East, the United States and more recently, Russia.The waiver is expected to remain in place until April 19, with an estimated 95 million barrels of Iranian oil currently stored on vessels at sea.Apart from crude, India has also received Iranian liquefied petroleum gas (LPG).The ministry confirmed that a vessel carrying around 44,000 metric tonnes of Iranian LPG berthed at the western port of Mangalore on April 2 and is currently discharging fuel.

What a US sanctions waiver could mean for India?

India has not purchased Iranian crude since mid-2019 after the US withdrew sanction waivers. However, the current crisis has brought the possibility of limited relief back into focus.Nearly 35–40 per cent of India’s crude oil imports pass through the Strait of Hormuz, a route now disrupted due to the ongoing conflict. This has increased urgency for India to secure alternative and reliable supplies.To offset potential shortages, India has ramped up purchases of Russian crude. According to Kpler, the country bought nearly 30 million barrels of Russian oil in a single week after the conflict escalated.If the US were to allow limited “unsanctioned” trade of Iranian oil at sea, it could provide India with another crucial supply source.Energy experts suggest India could quickly step up imports. Sumit Ritolia, Lead Research Analyst at Kpler, highlighted that historically India has been a major buyer due to strong refinery compatibility and favourable commercial terms.He said speculation around easing sanctions has reintroduced Iran as a key variable in global oil flows, adding that India could emerge as a major demand centre alongside China and other Asian buyers.“India could emerge as a key demand centre to watch, alongside Chinese buyers (state-owned enterprises and large independents) and other Asian countries,” he said.

As the Middle East war has stretched beyond a month, energy prices have soared sharply, sending ripples across the globe. Iran’s chokehold of Strait of Hormuz has pushed fuel costs higher, hitting energy supplies for major economies. The impact is visible in multiple sectors in India, with higher costs of fuel and petrochemical products feeding into everyday operations. From infrastructure projects to aviation and hospitality, industries are being forced to adjust to a rapidly shifting cost environment. The impact is being felt through rising project expenses, increased operational costs and growing pressure on margins. While some sectors are absorbing part of the burden, others are considering price revisions or recalibrating plans, highlighting how deeply energy costs are influencing business decisions.