Gas, groceries and back-to-school items are where shoppers might see
higher oil prices surface
[July 24, 2026] By
CATHY BUSSEWITZ, MAE ANDERSON and ANNE D'INNOCENZIO
NEW YORK (AP) — Already feeling pinched since the start of the Iran war,
consumers are likely to feel more pain ahead as oil prices pushed past
$100 a barrel Thursday amid renewed fighting and military strikes that
have left global oil supplies stranded in the Middle East.
The elevated price marked a turn from lower oil prices enjoyed briefly
when hostilities between the U.S. and Iran waned in June. Brent crude,
the international standard, last reached $100 a barrel in May.
Companies that produce and sell fresh food, school supplies and anything
that gets shipped using fuel reported cost impacts from an earlier spike
in energy prices after the U.S. and Israel attacked Iran. They’re likely
to continue passing some of their increased expenses to consumers.
“Since everything relies on petroleum in our economy, for good or ill,
if the cost of petroleum goes up, then everything else goes up as well,”
said Joe Adamski, a managing director at procurement services company
ProcureAbility.
Here's how higher oil prices could put more strain on the finances of
U.S. consumers.
Gasoline prices return to $4 or more in most states
Volatility along the Strait of Hormuz and broader regional instability
pushed up the price of crude oil, the main ingredient in gasoline, and
could continue to make driving costlier during the second half of
summer, according to motor club AAA.
The U.S. price for regular gasoline averaged $4.09 a gallon Thursday, 15
cents more than a week ago, and drivers in most states were paying $4 or
more, according to AAA.
“Given the typical lag along the oil industry’s supply chain, prices at
the pump are poised to keep rising at least into next week,” said Pavel
Molchanov, an investment strategy analyst at investment bank Raymond
James.
Molchanov, noted that futures prices for oil delivered later this year
and next year were lower, suggesting prices could fall once military
action ends.
For the most part, higher gasoline prices haven't stopped Americans from
driving. Gasoline demand rose 1% to 8.9 million barrels per day last
week, according to the U.S. Energy Information Administration.
Shoppers are paying more for a bag of groceries
Grocery prices generally rise with oil because farmers use diesel fuel
to power equipment, while many food products are transported by trucks
that require fuel.
“Oil at $100 doesn’t make food prices jump right away, but it does put
upward pressure across the food supply chains, especially for categories
that depend heavily on trucking, cold storage and packaging,” said
Miguel Gomez, a Cornell University professor who directs the school's
Food Industry Management Program. Fresh produce and dairy could feel a
larger impact because they require refrigeration during delivery.
Imported goods are also vulnerable to higher shipping costs, Gomez said.
“Things like olive oil that we produce very little here and are coming
from mostly from Europe are going to be up.”
Grocery chain Albertsons on Thursday lowered its 2026 fiscal outlook,
citing pressure on its core grocery business and a pullback in consumer
spending.
Every product that moves will have higher costs baked into the price
Higher fuel costs for ships, trucks and air carriers can trickle down to
consumers and businesses that depend on shipping. UPS, FedEx and other
shipping services introduced fuel surcharges and other fees as fuel
prices increased.
According to an AFS Logistics and TD Cowen Freight Index released July
14, truckload pricing is at a four-year high because of rising fuel
costs and capacity constraints.
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Cars line up at the pumps of a Gulf Oil station on the Massachusetts
Turnpike near Boston, Sunday, July 19, 2026. (AP Photo/Gene J.
Puskar, File)
 Andy Dyer, CEO of AFS Logistics,
said diesel prices in the second quarter were about 51% higher than
in January and February, while jet fuel prices rose 90% from a year
earlier.
“Beyond the direct impact of higher freight bills paid by shippers,
these price movements also have second-order effects that squeeze
rates higher,” he said. “Smaller truckload carriers working on tight
margins may park trucks and wait for fuel prices to revert to more
palatable levels before returning to operation.”
Retailers are noticing consumers pulling back
Rural lifestyle retailer Tractor Supply Co. reduced its annual sales
outlook on Thursday, citing in part higher fuel prices during its
spring selling season that weighed on customer spending.
”Our customers often drive longer distances to shop frequently in
pickup trucks, many of which are diesel-powered, making them
especially sensitive to higher fuel costs,” CEO Hal Lawton told
analysts.
Lawton said customers are still investing in their pets, animals,
farms and properties, but shopping has become “more deliberate.”
Customers are consolidating trips, prioritizing needs-based
purchases and taking a more measured approach to discretionary
spending.
Back-to-school shoppers may face higher prices
The Footwear Distributors and Retailers of America trade group
warned in a report Wednesday that increasing freight and material
costs, along with rising tariffs costs, were creating big challenges
for the footwear industry as families prepare for back-to-school
shopping and companies plan for the remainder of the year.
Matt Priest, CEO and president of the trade group, said some of its
members have cited 25% price increases for petroleum-based materials
used in footwear manufacturing due to the Middle East conflict.
Those costs could eventually translate into roughly a 5% increase in
the cost of finished footwear products sold to consumers, Priest
said in the report.
Footwear companies have been front-loading inventory and
accelerating imports before President Donald Trump imposes new
tariffs on foreign products, putting additional pressure on shipping
rates, he said.
“Container rates are spiking right now,” Priest said.
Higher jet fuel costs lead to costlier flights
Since the war began, airlines have responded to the jump in fuel
costs by raising fares and add-on fees, and trimming flights or
routes that are no longer profitable at higher fuel prices. Those
moves can help protect the airlines’ margins, but also leave
travelers facing higher prices and fewer options, particularly in
smaller or less competitive markets.
In the latest sign that the conflict is driving up costs for the
travel industry, American Airlines on Thursday reported a sharp
decline in second-quarter net income despite record revenue and
strong spring travel demand.
American said higher fares helped offset nearly half of its higher
fuel bill but not enough to prevent it from lowering its full-year
outlook.
Despite higher prices, jet fuel demand in the last four weeks
increased 9% compared to the same time last year, according to EIA.
___
Associated Press writers Rio Yamat in Las Vegas, Wyatte
Grantham-Philips and Dee-Ann Durbin in Detroit contributed to this
report.
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