Iran War Is Driving Prices Up — But Companies May Be Quietly Pushing Them Higher

US jet fuel prices have surged 95 per cent since the start of the war with Iran, and the cost is now landing squarely on consumers. Amazon, major airlines, and the US Postal Service have all introduced fuel surcharges or raised fees in recent weeks, while defence contractors and oil producers are posting sharp financial gains.

United Airlines chief executive Scott Kirby laid out the scale of the problem in a 20 March memo to staff. Fuel prices had more than doubled in three weeks, he said, projecting an extra $11 billion (£8.3 billion) in annual jet fuel costs if they stayed at current levels. 'For perspective, in United's best year ever, we made less than $5 billion,' Kirby wrote, CNN reported.

Both United and JetBlue have responded by charging passengers more for checked luggage. United added $10 (£7.50) per bag from 3 April. JetBlue raised fees by between $4 and $9 (£3 and £7), with a peak-time first bag now costing $49 (£37), up from $40 (£30). A JetBlue spokesperson tied the increase directly to rising operating costs.

Amazon took a different route. The company announced a temporary 3.5 per cent fuel and logistics surcharge for third-party sellers using its shipping and return services, effective later this month. Those sellers shipped more than 80 billion products through Amazon's fulfilment network last year. A spokesperson declined to say when the surcharge would be lifted.

The US Postal Service, meanwhile, announced on 25 March what it called its first-ever fuel surcharge on packages. The 8 per cent fee applies only to parcels, not letters. It takes effect on 26 April and will remain until at least 17 January 2027.

Hidden Costs Building Across the Supply Chain

Automatic surcharge mechanisms at UPS, FedEx, and other shippers have already kicked in. FedEx was charging a 26.5 per cent surcharge on ground and home deliveries as of 6 April, triggered once diesel prices exceed $3.55 (£2.68) per gallon. Maersk has tacked on additional fees to cover both higher oil prices and the cost of rerouting vessels away from parts of the Middle East.

Not all of these costs appear as line items on a receipt.

Rahul Shahani, a partner at McKinsey who leads its North American supply chain practice, told CNN that companies tend to squeeze internal efficiencies first. But eventually, he said, the pressure filters through higher free-shipping thresholds, fewer discounts, smaller package sizes, and slower delivery windows. The kind of changes a shopper might not immediately notice.

Defence Stocks and Oil Firms Gain as Consumer Costs Rise

The financial picture looks very different for defence contractors and energy firms. Lockheed Martin, the Pentagon's largest contractor, has seen its share price rise roughly 25 per cent since the start of the year. The US Department of Defense announced that would join Lockheed to help triple production of missile seekers, a move that further lifted aerospace stocks, The Guardian reported.

President Donald Trump weighed in on the economics of the conflict via Truth Social. 'The United States is the largest oil producer in the world, by far, so when oil prices go up, we make a lot of money,' he wrote.

US oil majors are broadly well diversified globally, which means they are gaining more from elevated crude prices than they are losing from disrupted Middle Eastern operations. Clay Seagle, a senior fellow at the Center for Strategic and International Studies energy programme, said the supply shock is more severe than what followed Russia's invasion of Ukraine in 2022. Back then, Russian crude was redirected, not removed. This time, Iranian oil has been taken off the market entirely.

None of the companies that have introduced surcharges or fee increases have given a timeline for reversing them.