Motorists around the world are already feeling the impact of the US and Israel’s war against Iran, and fuel prices have risen sharply since the war began.
In the United States, a gallon of regular gasoline that cost an average of $2.94 in February now costs $3.58, up 20 percent, according to data from AAA Fuel Prices, a tracker of retail fuel prices from the American Automobile Association (AAA).
While each U.S. state sets its own gasoline prices, several states have surpassed $4 per gallon, and California has surpassed $5 per gallon, the highest level in more than two years.
Which countries have the biggest oil price increases?
According to data analyzed by Global Petrol Prices, a data platform that tracks and publishes retail energy prices in approximately 150 countries, at least 85 countries have reported increases in gasoline prices following the initial attacks on Iran by the United States and Israel on February 28. Some nations announce price changes only at the end of each month, so expect higher prices for many others in April.
Vietnam recorded the largest increase in gasoline prices, up almost 50 percent, from $0.75 per liter of 95 octane gasoline on February 23 to $1.13 on March 9. Laos follows with an increase of 33 percent, then Cambodia with 19 percent, Australia with 18 percent and the United States with 17 percent.
The following table shows the countries that have increased gasoline prices at the pump.
Asian countries pay the highest price
Asia is disproportionately dependent on the Strait of Hormuz for oil and gas supplies, which has been effectively closed since the start of the war. The strait links the Gulf (also known as the Persian Gulf and Arabian Gulf) with 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 stabilize their energy markets. On March 8, Japan instructed its oil reserve sites to prepare for a possible release of strategic reserves. The next day, South Korea introduced a price cap for gasoline and diesel for the first time in 30 years.
In South Asia, the impact of war is more severe than in East Asia because countries like Pakistan and Bangladesh have much thinner financial reserves and strategic reserves.
In a bid to conserve energy, the Bangladesh government has ordered the immediate closure of all public and private universities. In Pakistan, government offices will now operate a four-day work week, while schools have closed and a 50 percent work-from-home policy has been enacted to save fuel.
In Europe, Group of Seven finance ministers called an emergency meeting to discuss rising prices, and French President Emmanuel Macron raised the possibility of releasing 20 to 30 percent of strategic emergency reserves to ease pressure on consumers.
How high oil costs drive up food prices
Oil prices and food prices move at the same time, and energy prices affect every stage of the food supply chain, from the fertilizers used in the fields to the trucks that transport food from the field to supermarket shelves.
The increase in oil prices also directly affects maritime transport and the cost of transportation.
“The lifeblood of the global economy is transportation,” economist David McWilliams told Al Jazeera. “It’s about getting things from A to B; it’s a logistics problem, a supply chain problem, and ultimately transportation is the power of the global economy.”
Fears of stagflation (rising inflation and unemployment, which have historically caused major oil shocks) are increasing. Economists point to the crises of 1973, 1978 and 2008 as evidence that every significant rise in oil prices has been followed, in some form, by a global recession.
In low-income countries, where populations spend a much larger proportion of their income on food and import large quantities of grains and fertilizers, rising oil prices could quickly translate into food shortages.
What products are made from oil and gas?
Oil and gas are used for much more than just fuel. They are raw material for thousands of everyday products.
Plastics, including water bottles, food packaging, phone cases and medical syringes, are all derived from crude oil.
Crude oil is also the hidden ingredient in synthetic fabrics like 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 Vaseline (Vaseline), lipsticks and concealers.
Household items also rely on oil-based ingredients, and laundry detergents, dishwashing liquids, and paints are derived from petroleum products.
The world’s food supply essentially relies on natural gas in the form of fertilizers, which are used to improve crop yields and ensure that food production can meet demand.
