Bottled water prices are expected to rise across the United States in the coming weeks, as the Iran war drives up oil costs and increases the expense of plastic production, experts have warned. Oil has surged past $100 a barrel since US and Israeli joint military strikes on Iran in late February, effectively shutting the Strait of Hormuz, which previously carried around 20 per cent of the world's daily oil supply.
Patrick Penfield, a professor of supply chain practice at Syracuse University, told Newsweek he expects a 5 per cent increase in the price of plastic bottled drinks this month. 'If we continue to see oil prices climb to $125 to $150 a barrel, it could double to 10 per cent in May and if oil reaches $200 a barrel, we will see a price increase of 25 to 30 per cent,' he said.
Matt Slutzker, a principal analyst at Wood Mackenzie, said he has already seen price increase announcements from prominent plastic producers. 'Those food and beverage brands will look to pass along those costs within their products,' he said, adding that Americans 'definitely can expect bottled water prices to increase in the US as a result of the Iran War.' Nine in ten Americans buy bottled water, and about one in five drink it exclusively.
However, some experts argue the US may not see such dramatic rises because it produces most of its own ethylene, a key plastic ingredient. Kenneth Gillingham, an economics professor at Yale, said: 'There might be a slight upward pressure on bottled water prices in the US, but not a substantial one, such as India.' Thomas Duncan, an economics professor at Radford University, warned that prices could continue to rise even after the Strait reopens, and that panic buying could deplete stocks and push prices up further.
Oil prices ticked up to $104 a barrel on Wednesday despite reports that the US and Iran may be nearing negotiations. President Donald Trump claimed the war will end in 'two to three weeks' and that oil prices will then drop, saying: 'All I have to do is leave Iran, and we'll be doing that very soon, and they'll tumble down.' Trump is scheduled to give a national address with an 'important update on Iran' on Wednesday night.
