Higher oil prices tend to push up food prices, but that doesn’t mean shoppers need to rush to stock up, economists say.
Brent crude used to trade near $60 a barrel but has soared to more than $100 a barrel in recent weeks as the Iran conflict disrupts the flow of oil through the Strait of Hormuz, through which about a fifth of the world’s oil is transported.
Rising oil prices could raise costs across the food supply chain, from fuel used in agriculture and fertilizer production to transportation and refrigeration, according to the St. Louis Fed.
Many consumers are already responding, according to a survey of 1,000 U.S. adults conducted March 9-13 by e-commerce platform Omnisend.
But such actions could backfire by causing a surge in demand, straining supply chains and putting further upward pressure on prices, economists say.
At the same time, changes in input costs, such as rising oil prices, are not transmitted to consumers all at once.
Some price increases could appear within weeks, especially for fresh produce, said David Ortega, a food economist and professor at Michigan State University. However, broader impacts tend to increase unevenly over time, rather than all at once.
“It’s not going to happen overnight,” Ortega said. He said higher oil prices could take months to fully impact grocery costs, and the impact could be felt throughout the year. Ortega added that the impact on food prices could be limited if the spike in food prices is short-lived, as oil prices tend to rise after months of high prices.
Why don’t food prices rise all at once?
While oil prices can fluctuate quickly, food prices usually don’t follow immediately, so there’s less reason to rush and stock up. Instead, these costs move through multiple layers of the food system, making their impact on food prices slower and less direct.
“Even if the price of fuel or gas goes up 10% or 20%, it doesn’t have a one-to-one correlation to higher prices at the grocery store,” Ortega said.
According to a 2025 analysis from the Federal Reserve Bank of Kansas City, these costs are trickled down the supply chain before they hit the shelves.
Part of the reason is that energy is just one input among many in the food system. According to the U.S. Department of Agriculture, direct energy costs account for only about 3 cents of the cost of food.
This 3 cents only reflects spending on fuel and electricity itself. Other parts of the food dollar also depend on energy, such as transporting, storing and cooking food, but those costs tend to be more indirect and trickle into consumer prices, Ortega said.
And producers do not immediately pass on the higher costs. “Price increases tend to be gradual and are usually driven by a belief that costs will continue to rise,” said Andrei Quinn Barabanov, supply chain industry practice lead at Moody’s.
Because most food products are in competitive markets, companies are likely to offset higher costs in less obvious ways, such as by reducing the number of promotions and sales, rather than raising prices across the board, he said.
Stocking up on groceries can be counterproductive
Because price increases tend to be gradual, it’s unlikely you’ll save much by rushing to stock up on groceries, and if too many people do it, it could put upward pressure on prices, experts say.
“I think it’s very counterproductive. It makes a bad situation even worse,” Ortega said.
If consumers buy more than usual, it could strain supply chains that rely on tightly controlled inventories, leading to shortages, he said. Supply chains are typically built to handle short-term disruptions, but sudden spikes in demand can overwhelm systems and empty shelves.
“We don’t want to turn a supply problem into a consumer or demand problem,” Ortega said. “If demand for a particular product spikes, it certainly puts upward pressure on prices.”
But if oil prices continue to rise for several months, the impact could be more pronounced in grocery stores, he said.
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