PHOENIX — Supply chain experts warn that continued conflict in the Middle East and disruptions to oil could lead to even more costs beyond pain at the gas pump.
Boat traffic along the Strait of Hormuz significantly slowed this week. This brings about one-fifth of the global supply of crude oil and gas to a halt. Disrupting markets across the East.
Hitendra Chaturvedi, a professor at ASU's W. P. Carey School of Business, said the economic ripple effects will not stay overseas.
"The economies and the countries that are getting impacted by the oil challenge, we get stuff from there that feeds our economy. If they will suffer, we are going to suffer,” Chaturvedi said.
Chaturvedi said if the conflict does not end quickly, it could take only a couple of weeks before the disruption reaches grocery store shelves, spurred by higher fuel costs.
"Diesel is used to transport all the groceries and other materials into our retail stores. So that is going to be the next domino to fall,” Chaturvedi said. "The best thing we can wish for, if this is a very quick ending to this conflict."
Beyond fuel, rising fertilizer prices could also strain one of Arizona's largest industries, farming.
"If the fertilizer prices increase, just how the tariffs were, ended up 90% of the tariffs were paid by the consumer. The same thing is going to happen here,” Chaturvedi said.
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