Iran War Oil Shock Drives Up Prices for Everyday Items from Toys to Pens
The tremors of the Middle East conflict are now reverberating through the global economy, reaching far beyond fuel pumps to impact the cost of everyday consumer goods. From children's beloved stuffed toys to essential items like pens and shaving cream, prices are set to rise as disruptions to oil supplies drive up the cost of petroleum-derived materials.
Plush Toys and Beyond: The Petrochemical Connection
Even whimsically named plush companions such as Snuggle Glove, Bizzikins, and Wobblies are proving vulnerable to the oil price shock. The widespread use of polyester and acrylic in soft toy manufacturing – synthetic fibres directly derived from petroleum – means these items are directly affected by Middle Eastern oil shipment restrictions.
Ricardo Venegas, CEO of Florida-based Aleni Brands, revealed that just three weeks into the conflict, their Chinese suppliers reported a 10 to 15 per cent cost increase for securing these essential materials. "I think this situation demonstrates how much oil permeates throughout our system, and we can't get away from it," said Mr Venegas, a 30-year toy industry veteran. "Who would have thought that the price of a toy would have a direct relationship with oil?"
The Vast Reach of Petrochemicals
The impact extends far beyond children's playthings. According to the US Department of Energy, petrochemicals derived from crude oil and natural gas are used in more than 6,000 consumer products. These include computer keyboards, lipstick, tennis rackets, pyjamas, soft contact lenses, detergent, chewing gum, shoes, crayons, shaving cream, pillows, aspirin, dentures, tape, umbrellas, and nylon guitar strings.
While 85 per cent of global oil consumption is in the form of fuel, the remaining 15 per cent goes into this wide range of consumer products, according to Gernot Wagner, a climate economist at Columbia University's School of Business. Crude oil is mostly a complex mixture of hydrocarbons, which refineries and chemical plants separate and break down into smaller chemical building blocks known as petrochemicals.
Six key petrochemicals – ethylene, propylene, butylene, benzene, toluene and xylenes – form the major foundations of plastics and synthetic materials like nylon and polyesters that manufacturers use to create countless everyday items.
Manufacturing Cost Pressures Mount
Materials account for a significant share of production costs for many manufacturers, including those that supply carpets, clothing and tires, according to Andrew Walberer, partner and global lead in the chemicals practice of global strategy and management consultancy Kearney.
Take a button-down shirt as an example. Mr Walberer estimated that materials account for 27-30 per cent of manufacturing costs, with labour contributing 10-30 per cent, and business expenses for marketing, distribution and administration comprising the rest.
Experts warn that if oil holds above $90 per barrel for the next several months, cost pressures will accelerate throughout the supply network. With disruptions to global oil supplies now entering their eighth week, trade groups and companies caution that elevated production costs could translate into higher prices for shoppers across multiple sectors.
Specific Industry Impacts
Footwear Industry: The Footwear Distributors and Retailers of America reports that roughly 70 per cent of materials in synthetic shoes are petrochemical-based, with 30 per cent of those material costs directly tied to oil price swings. Their analysis estimates that between materials, factory energy and transportation, companies paying more for petroleum could translate into a 1.5 per cent to 3 per cent increase in shoe prices by late summer and fall.
Apparel Sector: By the end of April, US shoe and clothing manufacturers need to start signing contracts with suppliers for orders of polyester materials to get their designs ready for the holiday shopping season. According to Nate Herman, executive vice president of the American Apparel & Footwear Association, the price of materials used in polyester textiles has increased from an average of 90 cents per kilogram before the conflict to $1.33 per kilogram, adding 10 to 15 cents to the production cost of each garment.
Business Responses to Rising Costs
Some businesses are looking for ways to offset rising costs. Lisa Lane, founder of Rinseroo which sells portable shower head, bathtub and sink attachments, recently tripled her order of slip-on hoses from China after her manufacturer warned of a 30 per cent price increase within 30 days. The components of Rinseroo's products include petroleum derivatives like polyvinyl chloride.
"We want to stay at that sweet spot where people want to continue to buy from us and feel like they're getting a good value," Ms Lane said, noting she wants to hold off on increasing prices for retailers after raising them last year to offset higher US tariffs on Chinese imports.
Other companies are taking more immediate action. Gentell, which sells wound care products like bandages, dressings, pads and sponges to nursing homes and medical facilities, plans to raise its prices by 15 per cent in a matter of weeks. CEO David Navazio noted that adhesives in the products rely on several petrochemicals, and with energy for production and materials combined, the company's costs are going up by 20 per cent.
Because bandages and dressings are necessities, Mr Navazio said he doesn't think his business will suffer if it raises customer prices. However, he expressed uncertainty about whether prices will come down once the war ends and oil shipments stabilise. "In the past, I've seen transportation costs come down, but I've never seen prices of raw material come down," he observed.
The Broader Economic Picture
For many outside the conflict zone, the war's most tangible consequence has been the increase in petrol prices. Travellers are also encountering higher airfares and flight fees as airlines adjust to rising jet fuel costs. Additionally, consumers may soon find themselves paying more for groceries, furniture, or any goods transported by diesel-powered lorries.
Mr Venegas of Aleni Brands said he would absorb higher material costs for now but expects to increase prices for customers by early 2027 if the war continues for another three to six months. This timeline reflects the complex supply chain dynamics and inventory buffers that provide temporary cushions against immediate price shocks.
As the conflict enters its eighth week, the interconnectedness of global markets becomes increasingly apparent, with geopolitical tensions in the Middle East translating directly to higher costs for everyday items that consumers around the world rely on.
