Global Energy Crisis Drives Up Costs of Household Goods and Food

Consumers are facing rising prices not only at the gas pump but also in everyday household products like laundry detergent, as global energy disruptions continue to impact supply chains. The ongoing conflict restricting passage through the Strait of Hormuz has triggered oil shocks that are now affecting a wide range of consumer goods.

Major companies like Unilever are responding by increasing prices on home care products, while inflation and supply chain challenges are pushing costs higher across the board. These developments could soon extend beyond household items, threatening to raise food prices due to fertilizer shortages and higher energy costs.

Unilever Signals Price Hikes Amid Rising Oil Costs

Unilever’s Chief Financial Officer Srinivas Phatak revealed that the company plans to implement frequent but modest price increases on certain home care products. These hikes, ranging from 2.7% to 3.3% this year, are driven by inflation and the rising cost of crude oil, which is expected to hover around $115 per barrel.

Phatak emphasized the delicate balance between maintaining consumer value and protecting profit margins, noting that the company anticipates full-year cost inflation between 750 million and 900 million euros—significantly higher than earlier forecasts.

Inflation and Supply Chain Strains Hit Consumers Hard

While detergent price increases may be less noticeable in the U.S., Americans are already feeling the pinch from soaring gas prices, which recently hit $4.23 per gallon. Inflation surged to 3.3% in March, the highest in two years, driven by complex factors including crude oil and its derivatives.

“The Middle East crisis has created uncertainties and has made the outlook a bit challenging. Inflation for us is just not one number. While there is crude and everyone really anchors around crude, it is complex because there are many crude-linked derivatives.”—Srinivas Phatak, Unilever CFO

Wider Impact: Fertilizer Shortages Threaten Food Prices

The Strait of Hormuz is a critical chokepoint not only for oil but also for about half of the world’s urea and one-third of global fertilizer supplies. The war’s timing, coinciding with the planting season, has forced many farmers to delay or reduce fertilizer purchases, risking lower crop yields and higher food prices.

• About 25% of U.S. farmers had not purchased fertilizer for the 2026 spring season as of March.
• Higher fertilizer costs may lead to shifts in crop production toward less fertilizer-dependent plants.
• Energy price hikes could divert grains from food to biofuel, increasing costs for animal feed and raising dairy and meat prices.

Looking Ahead: Prolonged Conflict Means Sustained Price Pressure

Even if shipping through the Strait of Hormuz normalizes later this year, analysts warn that oil and related commodity prices will remain elevated for some time. The inability to 'catch up' on delayed shipments means supply chain disruptions and inflationary pressures could persist.

“The longer the war lasts, the longer oil prices will stay high, and the slower they will be in returning to normal.”—Jeffrey Dorfman, Professor of Agricultural and Resource Economics, North Carolina State University