Recently, we were shocked to find that tomatoes, a staple ingredient for many of the diverse cultures in Chicago, had soared to $4.99 a pound at a local grocery store. This has unfortunately been a relatable story for many Chicagoans. Food prices
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across the country have increased by roughly 32% between January 2020 and January 2026. We have weathered food price rises from a series of economic shocks, including COVID-19, an avian flu outbreak, the ongoing Russia-Ukraine war and President Donald Trump’s tariffs on food imports. Unfortunately, we are now faced with even more (self-inflicted) economic pain due to the war in Iran.The closure of the Strait of Hormuz is Iran’s main point of leverage, which has sent oil prices soaring. This effect will ripple through the economy, particularly the food system, which relies on natural gas for fertilizer, diesel for trucking and fuel for farm operations. For the average person, however, it can be difficult to disentangle the impact of this latest crisis from persistent inflation and ongoing global and national events.
We looked into the ripple effects of the Iran war by combining recent forecasts with models of consumer price passthroughs. We estimate the impact on retail gasoline, heating and food prices. Naturally, the largest effect is going to be at the pump. Our analysis predicts a 38% increase in retail gasoline prices. This is pretty close to how far gasoline prices have already increased: from about $3 per gallon to more than $4 per gallon nationally.
By contrast, the impact on home heating costs is much smaller, around 2%. This difference is largely driven by the relative separation of the U.S. gas market, compared with oil. Unlike oil, natural gas is predominantly sold into regional markets, which greatly insulates our heating bills from international disruptions.
Food price impacts fall somewhere in between. We estimate an increase of roughly 3%, with the biggest impact coming from increases in diesel fuel prices. Diesel is used by the semitrailers that cart most of our food around. The exact increase varies greatly by product; some products are more sensitive to shipping costs. The biggest increases will be to inexpensive, perishable goods such as potatoes and onions, as well as fertilizer-intensive goods such as tomatoes. Other goods such as apples, which are harvested and then refrigerated for year-round distribution, will see less increases because shipping makes up less of their overall production costs.
A 3% increase is not trivial. The U.S. Department of Agriculture’s Economic Research Service estimates that food prices will increase by about 3.6% this year, not accounting for the war, so an additional 3% increase would nearly double the expected food inflation. However, the actual near-term increase could be less, in part because prices for gas and oil can fluctuate and because the majority of fertilizer has already been purchased for this year’s crop.
But we should still expect the long-term impacts to persist. Even if the Strait of Hormuz were to open tomorrow (or yesterday), analysts predict that disruptions along the supply chain would last for months, not weeks. Furthermore, President Donald Trump’s administration has been sending mixed, if not blatantly false, signals about ongoing negotiations. We should expect that shipping companies will wait until there is lasting, meaningful stability in the strait to fully resume operations. Oil and gas fields will do the same, as there is little reason to restart the expensive and time-intensive process of oil and gas extraction until normal shipping routes have been restored.
In the meantime, Americans will have to get used to higher grocery bills.
To try to address prices, the administration has been gradually releasing 172 million barrels of oil from our 410 million barrel reserve. Indeed, the stockpile was created for exactly these kinds of economic shocks (self-imposed or not). Unfortunately, this supply is both exhaustible and relatively trivial compared with the roughly 20 million barrels of oil that normally flow through the strait per day. The U.S.’ own stockpiles could only stabilize prices for 20 days. If instead, the whole world were to release all of its strategic oil reserves to compensate for the strait closure, we could only keep prices stable for roughly four months.
So when we see sticker shock at the grocery store, who should we blame for the largest oil crisis in history? The public is pointing the finger at Trump, as most were even before the war. The president’s role in this is indeed hard to ignore. However, Congress holds the constitutional power to declare war and levy tariffs, not the president. If Trump is to blame, Congress is at the very least complicit.
Levers exist to limit this harm and check the administration, if only Congress chooses to exercise them.
Wes Zebrowski and Richard Melstrom are assistant professors in the School of Environmental Sustainability at Loyola University Chicago. They are experts in agricultural economics and policy.
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