War in Iran: Ink, plastic, clothes… Why the blockade of Hormuz is causing “all everyday prices” to explode

The blockage of the Strait of Hormuz since the start of the war in the Middle East does not only paralyze the transport sector. In Japan, the Calbee brand – giant of chips with multiple flavors – is swapping its yellow and orange bags for black and white packaging. What? You don’t see the connection with the war in the Middle East? The reason is simple. If the price of fuel is increased, this is also the case for naphtha, resulting from the distillation of oil and used in the composition of the ink in certain packaging.

“The supply of naphtha became unstable and demands to increase the price of ink began in the middle of last month,” printing company Toyama Sugaki told TBS television. “Between 10 and 20%” more than normal depending on the type of ink and the manufacturers.

An impact “in almost the entire economy”

This impact on packets of Japanese chips may make you smile, in reality, it is only a reflection of the impact of the blockage of the Strait of Hormuz on a multitude of sectors. Michel Fayad, a specialist in geopolitics and hydrocarbon markets, summarizes the functions of oil in four major areas: “It is both a source of energy and fuel but also a chemical raw material, a base for manufacturing synthetic materials and a logistical support and industrial sector of almost the entire modern economy.”

Automobile tires, soles, coolant, snowshoes, glue, vaseline… In short, petroleum and petrochemical derivatives are everywhere. “This is precisely what makes an oil shock so feared,” continues the expert, “it does not only affect gasoline at the pump, it gradually spreads throughout almost the entire economy.”

Rising consumer prices

In France, the data can already prove it. According to an INSEE study published on Wednesday, in April, consumer prices increased by 2.2% over one year. “This increase in inflation can once again be explained by the sharp acceleration in energy prices […] in particular those of petroleum products” which increased by 31.4% in April after an increase of 18.1% in March, attests the institute.

In summary, this cascading reaction is therefore justified by the increase in the cost of oil-derived products – including plastic – which is reflected in the purchase of packaged products, bottles, electronic devices, medical equipment… But also by the price of transporting goods which is causing the prices of food, electronics, clothing, furniture and even construction materials to soar.

“If the citizen first sees the price at the pump, oil is so integrated into the production and transport chains that its increase ends up being found almost everywhere in everyday prices,” adds Michel Fayad, who cites the oil shocks of 1973 and 1979 as examples. “At first the problem seemed “energy†, but very quickly the entire economy was affected: industrial slowdown, rising prices, decline in purchasing power, massive inflation and sometimes recession.â€

Our report on the war in Iran

In these situations, the chemical, steel, intensive agriculture and even construction sectors are subject to increases. Result: “Many factories are seeing their costs explode, which can reduce margins, slow down production or lead to price increases for the end consumer.” It remains to be seen whether the consumer will prefer to buy their chips in black and white, or in color… But a little more expensive.