Why (almost) everything is going up in price due to the war in Iran

A map of the Strait of Hormuz with a burger, laptop, phone and teddy bear
Fast food, tech and cuddly toys are among the items facing a price squeeze (Picture: Getty)

It’s no surprise that we’re having to shell out more at the petrol pumps as a result of the war in Iran and the squeeze on oil supplies.

But you may have noticed it’s not just fuel that’s been climbing in price since the end of February.

The Middle East conflict has served as a painful reminder of just how interconnected the global economy and supply chains have become – and how oil plays an even bigger role in everyday life than we might think.

This might be most obvious in the regular supermarket shop, with experts estimating the average UK household could be spending almost £340 a year more for food and drink.

And that’s not just because it’s more expensive to transport the products around the world due to the price of fuel.

Ammonia has gone up in price, due to the essential role natural gas plays in its production. That has made fertiliser more pricy, with a knock-on impact on crops and vegetables.

A byproduct of that process is CO2 which is itself used to produce and preserve items from pork and chicken to frozen food and beer.

Here are a few of other everyday items that could see a price hit from Iran.

Phones and laptops

Young Asian man managing finance and investment online, analyzing stock market trades with smartphone and laptop. Making financial plans. Banking and finance, investment, financial trading, mobile banking with technology concept
The price of helium could have an impact on the cost of new tech (Credits: Getty Images)

Beyond oil and gas, another resource concentrated in the Persian Gulf is helium.

That’s not just a problem for people who like to speak in a high voice at parties: helium is an essential part of the manufacturing process of microchips.

The pressure on the supply chain will hit phones and laptops – while also causing problems for the building of certain medical devices that use chips to function.

Fast food

This week, McDonald’s announced it is set to raise prices due to the squeeze from the Iran war.

Lauren Shultz, the boss of the fast food giant’s UK arm, told BBC Radio 4’s Today programme: ‘We have long standing, strong relationships with our suppliers, who have given us a lot of cost certainty.

‘We will likely to see some prices go up but in a small disciplined way. It is where customers are willing to pay a little bit more.’

Cuddly toys

One of the more unexpected items to come under pressure from the situation in the Strait of Hormuz is the cuddly toy.

The materials that make these furry friends so huggable are synthetic fibres such as polyester and acrylic – which are directly derived from petroleum.

Ricardo Venegas, who owns toy manufacturer Aleni Brands, told the Associated Press: ‘I think this situation demonstrates how much oil permeates throughout our system, and we can’t get away from it.’

Condoms

In this picture taken September 20, 2017, Malaysian condom-maker Karex Industries Chief Executive officer (CEO) Goh Miah Kiat gestures during an interview with AFP at the company's headquarters in Port Klang. After enjoying success with an inventive range of condoms, a Malaysian industry giant will add an unusual flavour to its arsenal of contraceptives -- the country's beloved national rice dish, nasi lemak. Karex Industries, which claims to be the world's biggest condom maker, already offers an array of flavours in various pleasure-boosting textures, from grape to the pungent tropical fruit durian. (Photo by MANAN VATSYAYANA / AFP via Getty Images)
Karex CEO Goh Miah Kiat has warned he’ll be bumping up the price of his products (Picture: Manan Vatsyayana/AFP via Getty Images)

Earlier this week, it was reported that the world’s top producer of condoms was hiking up prices by up to 30% in response to the Iran war.

Karex Bhd, which supplies leading brands like Durex and Trojan, said costs were rising for everything from synthetic rubber and nitrile used in manufacturing condoms to packaging materials and lubricants such as aluminium foils and silicone oil.

CEO Goh Miah Kiat said: ‘The situation is definitely very fragile, prices are high… We have no choice but to transfer the costs right now to the customers.’

Almost everything else you can think of

Petrochemicals, which are derived from oil and natural gas, are vital for the production of more than 6,000 everyday products, according to the US Department of Energy.

The list of items that use petrochemicals is dizzying – modern life simply couldn’t happen without them.

They’re essential for antihistamines, artificial limbs, ballpoint pens, candles, clothes, computer keyboards and monitors, curtains, glue, golf balls, hand lotion, insulation, luggage, parachutes, roofing, shampoo, solar panels, toothbrushes and bin bags.

Houses

One of the few places where prices have actually gone down is the one place many people don’t want to see it – housing.

The average UK house price fell by 0.5% in March, according to Halifax.

That was driven by the increase in mortgage rates due to the repercussions of the war in Iran, which in turn has hit demand for houses.

Get in touch with our news team by emailing us at webnews@metro.co.uk.

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