Strait of Hormuz closure could drive up costs beyond the gas pump, experts warn

HARRISONBURG, Va. (WHSV) – The closure of the Strait of Hormuz’ has affected many aspects of the global economy, including surging crude oil barrel prices.

Mert Tokman, a professor of marketing and international business at James Madison University, said crude oil prices have a big impact on the global economy, not just fuel prices.

“The higher diesel cost, you know, for every farm truck and every poultry shipment and more chaotic, you know, freight floors in and out of the East Coast ports,” Tokman said. “When the the oil tankers are late, you know, that delays, you know, production facilities. So it creates a ripple effect that impacts, you know, many different industries.”

Tokman emphasized how logistics and travel industries will be the most impacted, but not the only facets of the U.S. economy that will struggle as the war continues.

Another use of crude oil is making plastics. If the war continues, Tokman said consumers might face price increases in other products.

The United States is one of the major producers of oil in the world. According to the Department of Energy, only a small amount of the U.S’s petroleum consumption comes from the Strait of Hormuz.

Tokman said the prices in America don’t come from an American shortage of oil. It’s a reflection of the global market.

Tokman said when the war concludes, Americans might see an immediate price decrease but not near the pre-war levels. He said that could be one or two months after the conflict ends until Americans feel the full relief.