High fuel prices during Iran war hit budget beyond the gas pump

As the US-Iran war enters its fifth week, consumers are facing economic consequences that are affecting everything from travel planning to mail delivery.

Companies and other organizations are increasingly preparing for an environment in which the conflict – and the subsequent shock to crude oil prices – turns from an unexpected shock into a long-term challenge. As corporate policies change, Americans will feel it beyond the gas pump, to their wallets.

Many companies are linking these adjustments to rising oil prices, as well as a drop in supply due to the blockage of the Strait of Hormuz. prices on may contract brent Oil — a global benchmark for oil prices — has surged more than 55% in March, on track for its biggest monthly gain on record dating back to 1998. US oil prices are up slightly, registering a month-on-month increase of 49%.

The U.S. Postal Service said Wednesday it is considering imposing a temporary 8% fuel surcharge on package and express mail deliveries. The USPS said the tax, which requires regulatory approval, would begin in late April and last through early 2027.

“This temporary price adjustment will provide needed flexibility for the Postal Service, helping to ensure that the real cost of doing business is covered, as required by Congress,” the Postal Service said in its announcement.

The Postal Service said its fee is lower than those issued by competitors. FedEx, And Above CNBC previously reported that fuel surcharge fees were increased following the US-Israeli attacks on Iran.

United Airlines According to a memo from CEO Scott Kirby, some less-profitable flights will be cut in the coming quarters due to rising fuel costs. Midweek, Saturday and night routes are among those targeted.

The Chicago-based air carrier plans to help oil reach $175 a barrel by the end of next year and stay above the $100 mark. Kirby said United’s fuel bill at those prices could rise to $11 billion, more than double the profit the company made in its peak years.

Passengers should be prepared to pay more for tickets as a result of higher fuel costs, Kirby told CNBC’s Phil LeBeau this week. He said oil is the second biggest expense for the company after labour.

“I think rents will continue to rise in line with oil prices,” Kirby said. “In any business, but certainly in airlines, you have to go through the costs of inputs.”

Higher oil prices may increase production costs 3M product, CEO William Brown said at an industry conference earlier this month. He said Command and Post-It parents could raise prices, as they did after President Donald Trump’s tariff policy was implemented nearly a year ago.

“If oil prices remain high, we will have to take action and respond to pricing as we did last year,” Brown said.

Doordash And lift roll “relief” programs This week that includes expanded reward offers at gas stations. Advocates for gig-work platform drivers say these workers do not have the same ability to adjust rates when costs rise as other independent contractors.

“Drivers are bearing the brunt of rising gas prices, which ultimately impacts their earnings,” Yuko Yamazaki, Lyft’s driver chief, said in a statement.

The average price of unleaded gas in the US has approached $4, according to , which is about 33% higher than a month ago. aaa. Organization Said The last time gas prices were this high was during Russia’s invasion of Ukraine in 2022.

Americans are becoming less confident about the economy as they brace for higher inflation, according to University of Michigan survey data of consumers released Friday. The headline index fell nearly 6% in March to one of the lowest levels on record.

“The war hurts consumer sentiment about the economy. This is not a shocking revelation,” said Elizabeth Renter, senior economist at NerdWallet, a financial education platform. “When we go to war, people anticipate worsening economic constraints, including rising prices.”

— CNBC’s Dan Mangan and Jeff Cox contributed to this report.