Rising oil prices could increase food costs—but hoarding groceries ‘makes a bad situation worse,’ economist says in World Economy News 31/03/2026 Rising oil prices tend to push up the cost of groceries, but that doesn’t mean shoppers need to rush out and stock up, economists say. Brent crude has surged above $100 a barrel in recent weeks — after trading closer to $60 in January — as the Iran conflict disrupts flows through the Strait of Hormuz, a chokepoint that carries about one-fifth of the world’s oil. Higher oil prices can raise costs across the food supply chain, from fuel used in farming and fertilizer production to transportation and refrigeration, according to the Federal Reserve Bank of St. Louis. Many consumers are already reacting: About 48% said they’re buying certain items in bulk because they expect prices to rise, according to a survey of 1,000 U.S. adults conducted March 9 to 13 by ecommerce platform Omnisend. But that kind of behavior can backfire, economists say, by creating demand spikes, straining supply chains and putting additional upward pressure on prices. At the same time, changes in input costs — like a surge in oil prices — don’t reach consumers all at once. Some price increases can appear within weeks, particularly for perishable goods, says David Ortega, a food economist and professor at Michigan State University. But the broader impact tends to build more gradually and unevenly, rather than all at once. “It’s not going to happen overnight,” says Ortega. The full effect of higher oil prices on grocery costs can take months and may play out over much of the year, he says. If the spike is short-lived, the impact on grocery prices may be limited, since increases tend to show up when higher oil costs persist for months, Ortega adds. Why grocery prices don’t rise all at once While oil prices can move quickly, grocery prices usually don’t follow right away, leaving less reason to rush out and stock up. Instead, those costs move through multiple layers of the food system, making their effect on grocery prices slower and less direct. “A 10 or 20% increase in the price of fuel or gas…is not going to translate one to one to increases at the grocery store,” says Ortega. Those costs are passed along gradually through supply chains before showing up on store shelves, according to a 2025 analysis from the Federal Reserve Bank of Kansas City. That’s partly because energy is just one of many inputs in the food system. Direct energy costs account for only about three cents of every food dollar, according to the U.S. Department of Agriculture. Those three cents only reflect spending on fuel and electricity itself. While other parts of the food dollar — such as transporting, storing and preparing food — also rely on energy, those costs are more indirect and tend to show up more gradually in consumer prices, Ortega says. And producers don’t immediately pass along higher costs. “Price increases tend to be gradual and are usually triggered by a determination that cost increases will stick,” says Andrei Quinn-Barabanov, a supply chain industry practice lead at Moody’s. Since most food products are in a highly competitive market, companies are also more likely to offset higher costs in less visible ways — such as offering fewer promotions or sales — instead of raising prices outright, he says. Stocking up on groceries can backfire Because price increases tend to be gradual, rushing to stock up on groceries is unlikely to save much