Motorists around the globe are already feeling the impact of the United States and Israel’s war on Iran, with fuel prices sharply rising since the war began.
In the US, a gallon of regular petrol that averaged $2.94 in February now costs $3.58, marking a 20 percent increase, according to data from AAA Fuel Prices, a retail fuel price tracker from the American Automobile Association (AAA).
While each US state sets its own petrol prices, several states have surpassed $4 per gallon, with California exceeding $5 per gallon, the highest level it has been in more than two years.
Which countries have the sharpest petrol price increases?
According to data analysed from Global Petrol Prices, a data platform that tracks and publishes retail energy prices across approximately 150 countries, at least 85 countries have reported increases in petrol prices following the initial attacks on Iran by the US and Israel on February 28. Some nations announce price changes only at the end of each month, so higher prices are expected for many others in April.
Vietnam recorded the highest petrol price increase of nearly 50 percent, rising from $0.75 per litre of 95-octane on February 23 to $1.13 on March 9. Laos follows with a 33 percent increase, then Cambodia at 19 percent, Australia at 18 percent, and the US at 17 percent.
The table below shows the countries that have increased petrol prices at the pumps.
Asian countries pay the biggest price
Asia is disproportionately dependent on the Strait of Hormuz for the delivery of its oil and gas, which has been effectively closed since the start of the war. The strait joins the Gulf – also referred to as the Persian Gulf and the Arabian Gulf – to the Gulf of Oman and is the only passage for the region’s oil producers to the open ocean.
Japan and South Korea are among the most vulnerable, importing 95 percent and 70 percent of their oil from the Gulf, respectively.
Both East Asian nations have enacted emergency measures to stabilise their energy markets. On March 8, Japan instructed its oil reserve sites to prepare for a potential release of strategic reserves. The next day, South Korea introduced a maximum price cap on petrol and diesel for the first time in 30 years.
In South Asia, the impact of the war is more severe than in East Asia because countries like Pakistan and Bangladesh have much thinner financial buffers and smaller strategic reserves.
In an attempt to conserve energy, Bangladesh‘s government has ordered all public and private universities to close immediately. In Pakistan, government offices will now operate a four-day workweek, while schools have closed, and a 50 percent work-from-home policy has been enacted to save fuel.
In Europe, the Group of Seven finance ministers convened an emergency meeting to discuss rising prices, with French President Emmanuel Macron raising the possibility of releasing 20-30 percent of emergency strategic reserves to ease the pressure on consumers.
How high oil costs drive up the price of food
Oil prices and food prices move in lockstep, with energy prices affecting every stage of the food supply chain, from the fertilisers used in the fields to the trucks that carry food from field to supermarket shelf.
Rising oil prices also directly affect shipping and the cost of transport.
“The lifeblood of the global economy is transport,” economist David McWilliams told Al Jazeera. “It’s getting stuff from A to B – it’s a logistics problem, a supply chain problem, and ultimately transportation is the energy of the global economy.”
Fears of stagflation – increasing inflation and rising unemployment, which major oil shocks have historically summoned – are rising. Economists point to the crises of 1973, 1978 and 2008 as evidence that every significant spike in oil prices has been followed, in some form, by global recession.
In lower-income countries, where populations spend a far greater share of their income on food and import large quantities of grain and fertiliser, rising oil prices could rapidly translate into food shortages.
What products are made from oil and gas?
Oil and gas are used for far more than just fuel. They are raw materials for thousands of everyday products.
Plastics, including water bottles, food packaging, phone casings and medical syringes, are all derived from crude oil.
Crude oil is also the hidden ingredient in synthetic fabrics such as polyester, nylon and acrylic, which are used to make everything from sportswear to carpets. It also underpins the cosmetics industry, as it is used to make products such as petroleum jelly (Vaseline), lipsticks and concealers.
Household items also rely on oil-based ingredients, with laundry detergents, dishwashing liquids, and paints all derived from petroleum products.
The global food supply is essentially built on natural gas in the form of fertilisers, used to enhance crop yields and ensure that food production can meet demand.
