It seems like we’ve been watching the oil prices rise for weeks (except that one dip where somebody made a lot of money and nobody will be held accountable, let alone investigated).
But as of the March 4th closure of the Strait of Hormuz, the slow-motion train wreck of economic instability has officially picked up speed, which makes me nervous as a prepper. Because we aren’t just talking about a few cents rise in gas prices at the pump anymore. Dubai crude is now hovering around $130 (as of this weekend when I wrote this), more than double what it was a month ago. Just look at this price chart and you’ll see what I mean.
How many of us preppers are actually prepared for what this continued oil spike does to the rest of our survival plan? Clearly, most sheeple are still focusing on the gas station prices, but we need to look deeper than that because rising oil prices affect more than just gas prices.
For starters, the fallout from Operation Epic Fury and Iran’s subsequent retaliation has effectively trapped over 20% of the world’s daily oil supply behind a maritime blockade that, let’s face it, largely only affects Western-allied countries. As a result, this is history’s biggest oil-supply interruption, even larger than the 1973 energy crisis, which held up about 7% at the time.
For those of us who have been watching market patterns for years, this isn’t a surprise. But the speed of the change is something even the most seasoned preppers are probably feeling by now. The problem is that it’s only going to worsen the longer the war and blockade continue, and it’s going to affect almost everything you need to survive.
The Price at the Pump is Just the Beginning
Obviously, the most visible impact is what you’re paying to fill up your gas tank. Nationwide, gas prices have jumped about 20% in a single month, with the average hitting $3.58 and quickly climbing toward that magical $4.00 mark in most regions. In places like Los Angeles, we’re already seeing well over that price. But the real danger isn’t just the cost of your daily commute; it’s the hidden tax of transportation costs that are about to hike the price of almost every single item you buy.
Because when diesel prices spike, as they have in some Asian markets recently, the cost of moving goods from a factory to your local store rises, sometimes drastically. Most people don’t realize that transportation and energy can account for up to 50% of the variable costs of food production, for instance. This is exactly why I’ve emphasized the importance of understanding how to combat inflation as a prepper. But you can only do so much if the cost of the fuel to move the truck goes up, the price of the food inside that truck must follow to some degree. It’s a simple, brutal reality of our current just-in-time, profit-driven economy.
In fact, we’re seeing the secondary effects already. Shipping companies like Maersk have suspended transits through the strait (mostly because insurance won’t cover the risk), and rerouting ships around Africa adds weeks to transit times and massive amounts to the fuel bill, if they can even fill up the oil tankers to begin with. This creates a lag in the supply chain that most consumers won’t feel for another month or two, but it’s surely coming.
This is the kind of situation where you start to understand why these 20 items disappear first in hyperinflation. It’s not just about people panic-buying, but about the items literally not being able to reach the shelves because the transportation costs have become unsustainable for transport companies to profit without also upsetting customers (business customers, not you). Well, there’s also long-term contracts involved and a lot about the global supply chains that I don’t fully understand, but that’s the gist. Suffice it to say that prices will be rising no matter what happens in the near future!
And I haven’t even touched on jet fuel prices rising drastically too. The cost of that trip to the Florida Keys or to see Grandma and Grandpa is going to rise as well. As will the cost of shipping goods too!
I recently watched this video that explains the immediate market panic and how the International Energy Agency (IEA) is trying to manage the largest emergency oil reserve release in history to stop the bleeding of rising oil prices:
As the video notes, the IEA is releasing over 400 million barrels of oil, but even that is just a short-term stopgap. The real problems will be months from now.
The Nitrogen Dilemma May Be More Problematic
Another overlooked part of this “oil spike,” at least for the time being, is nitrogen fertilizer. Most people don’t connect a conflict in the Middle East with the price of corn here in the Midwest, but they should. The Middle East accounts for roughly 12% of global nitrogen production and nearly 25% of its exports. Natural gas is a key ingredient in nitrogen fertilizers, like urea and anhydrous ammonia, and with the current disruptions, we’ve seen urea futures jump nearly 30% in just a few days. I wonder how much higher they might go?
For farmers knee-deep in the planting season already, a 30% spike in fertilizer costs is a disaster because fertilizer is often the most significant non-land cost for a farmer, sometimes accounting for 20% of their total production expenses.
If farmers can’t afford the fertilizer, or if fertilizer and fuel are stuck on a tanker in the Persian Gulf, they won’t be able to plant as much. And if they don’t plant, we don’t eat—or at least, we don’t eat as affordably as we used to. Because the truth is that rich countries, like the United States still is for now, will pay for the fertilizer and transportation costs; it’s the poorer countries that will go hungry. But you and I will still pay more for the priviledge nonetheless.
Global supply chains are incredibly fragile, and when a major energy hub like the Middle East goes offline, the ripples turn into waves eventually. We’re currently watching the global “just-in-time” delivery system fail in real-time, something I should’ve emphasized more in my book, Why We Prepare. But there’s a lot more that can go wrong when we rely on so many other people and systems (and countries) to supply us with everything we need to survive.
There’s More Being Affected
Beyond the immediate price increases at the gas pump and fertilizer concerns, there is a quieter crisis unfolding. With major Gulf air hubs like Dubai and Doha effectively paralyzed by Iran, regional air-cargo capacity has plummeted by nearly 80% this month. The impact on temperature-sensitive pharmaceuticals is quickly becoming a concern, something most people aren’t talking about.
You see, most people don’t think about it, but life-saving drugs like insulin and vaccines are physically fragile; many require a constant refrigerated temperature and have fairly short shelf lives. As air freight rates on some routes surge by 400% or more, these vital supplies are either being priced out of transport or, worse, are sitting on tarmac in alternate hubs, risking spoilage from routing delays. This is another breakdown of the just-in-time delivery system, this time of crucial medical supplies.
Understand that when airspace closures force carriers to reroute, it not only adds to the cost but also time to a journey where hours counts. I’m not saying were at the point of panic yet, but if you or someone in your family relies on daily, refrigerated medications, this is something to talk to your doctor about.
On the industrial side, the Middle East is the primary source of naphtha, a critical petroleum by-product used as the basis for almost all modern plastics and electronics. Japan and South Korea, for instance, which rely on the Gulf for over 70% of their naphtha, are already cutting industrial production by up to 30%. Products like resins, adhesives, and coatings that go into every piece of electronics and appliance you want or need will be affected.
As these petrochemicals disappear, manufacturing costs are rising across Asia. In some regions, naphtha prices have jumped 66% in mere weeks, a cost that will inevitably be passed on to us soon enough. The question is no longer if these items will get more expensive, but when they may become unavailable. Granted, some items can be ignored, like televisions, but supplies like IV bags cannot.
Final Thoughts
Clearly, the best thing you can do right now is focus on what you can control. Stockpiling essential supplies—especially food that doesn’t rely on this year’s coming harvest—is more critical than ever. We’ve seen this pattern before in the 1970s, and the lesson is always the same: those who wait for the government to “fix” the price at the pump are the ones who end up with empty gas tanks and bare cupboards.
Don’t be that person!
Treat these price spikes as the warning sirens they are and adjust your planning accordingly while the price of goods, fuel, and everything else is relatively low … all while ignoring what inflation has already robbed from you over the past century.
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