Strait of Hormuz Closure Drives Up Grocery Costs Worldwide

Disruption to oil, gas, and petrochemical supply chains from the strategic waterway closure is expected to impact food prices for over a year.

Apr. 1, 2026 at 8:18am

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The closure of the Strait of Hormuz, a critical global energy chokepoint, has led to a surge in oil, natural gas, and petrochemical prices. This is having a ripple effect on the cost of everyday consumer goods, especially food, as over 99% of the world's plastics are derived from fossil fuels. Experts predict the impact on grocery bills will be felt for 12-24 months, even if the geopolitical conflict is resolved quickly.

Why it matters

The Strait of Hormuz closure is a prime example of how globalized supply chains can transmit shocks across borders and industries. While the initial impact was felt at gas pumps, the downstream effects on plastic packaging and fertilizer production threaten to make basic groceries significantly more expensive for consumers worldwide.

The details

About 20% of the world's oil and liquefied natural gas supply passes through the Strait of Hormuz daily. After the waterway was effectively closed in early March 2026 following U.S.-Israeli strikes on Iran, oil prices spiked over 40% to above $98 per barrel. Natural gas prices in Asia and Europe jumped more than 60%. This price surge is impacting the production of over 99% of the world's plastics, which are derived from fossil fuels. Roughly 25% of global polyethylene and polypropylene exports come from the Middle East, with 84% of that capacity relying on the Strait of Hormuz for shipping. Petrochemical companies in Asia have had to cut production by up to 50%. Additionally, 30% of globally traded ammonia-based nitrogen fertilizer moves through the Strait, causing prices at the key New Orleans import hub to surge 32% in just one week.

  • The Strait of Hormuz was effectively closed in early March 2026 following U.S.-Israeli strikes on Iran.
  • Oil prices spiked from $67 per barrel to over $98 at their peak on March 20, 2026.
  • Polyethylene and polypropylene prices saw their largest monthly increase in 25 years over the last 30 days.
  • Fertilizer prices at the New Orleans import hub rose 32% in just one week, from $516 to $683 per metric ton.

The players

Strait of Hormuz

A strategic waterway that controls approximately 20% of the world's oil and liquefied natural gas supply.

Michael Greenberg

An expert who has been monitoring resin markets for 25 years and stated he has never witnessed a monthly rise in polyethylene prices as significant as what has happened over the last 30 days.

Patrick Penfield

A supply chain professor at Syracuse University who predicts rising packaging costs will affect food prices in 2-4 months.

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What they’re saying

“I have never witnessed a monthly rise in polyethylene prices as significant as what has happened over the last 30 days.”

— Michael Greenberg, Resin market expert

“As businesses deplete their current inventory, rising packaging costs will eventually affect food prices in two to four months.”

— Patrick Penfield, Supply chain professor

What’s next

The impact of the Strait of Hormuz closure on global supply chains and consumer prices is expected to continue for 12-24 months, even if the underlying geopolitical conflict is resolved quickly.

The takeaway

The Strait of Hormuz closure demonstrates how globalized supply chains can transmit shocks across borders and industries, with the downstream effects on plastic packaging and fertilizer production threatening to make basic groceries significantly more expensive for consumers worldwide over an extended period.