The news: The war in the Middle East is poised to deal another serious blow to US consumers’ buying power, as households contend with rapid spikes in energy costs and higher prices for food and other everyday goods.

Zoom in: The monthlong closure of the Strait of Hormuz has repercussions far beyond oil prices.

Any industry that uses plastics or other petroleum-derived materials faces increased input costs, which will eventually filter their way to the consumer. Petrochemicals’ wide use across supply chains means that most all companies are likely to be affected by the supply shock from the expanding war.

• Plastic suppliers in China have already raised prices by roughly 15% recently, one packaging company CEO told CNBC, although the speed at which those costs reach the consumer will vary depending on the product.
• Higher prices for items like plastic cutlery, bottled drinks, and garbage bags are likely very soon.
• Durable goods like autos may take up to a year to reflect rising plastic costs due to contracts locked in before the war’s expansion.

The longer the conflict continues, the greater the disruption in manufacturing. More than one-fifth of the world’s supply of petrochemicals, intermediates, and finished products flows through the Gulf, with a downstream impact on $3.8 trillion of goods, according to supply chain analytics company Altana.

A lengthier war also threatens the global food supply. Almost one-third of the world’s fertilizer passes through the Strait of Hormuz, while the Middle East is an important source of both fertilizer and the natural gas used to produce it.

Rising fertilizer costs and shrinking supply could pressure US farmers. Those that failed to place their orders early enough may not be able to obtain fertilizer, even if they can afford higher prices, Zippy Duvall, president of the American Farm Bureau Federation, told the Associated Press. Farmers that don’t use fertilizer face reduced crop yields, which will lead to higher prices and diminished food availability on grocery store shelves.

Implications for the retail industry: Higher prices for food, gas, and other essential items will erode purchasing power for US consumers, particularly lower-income households already hurt by slower wage growth.

Discretionary spending is also likely to be hard-hit.

• Restaurants are under strain: QSR comparable sales fell every week in March, which according to Bernstein reflected incremental pressure on low-income consumers who spend a disproportionate amount of their earnings on gas.
• Air travel is becoming less accessible: Higher fuel costs are likely to disrupt consumers’ summer travel plans.
• Road trips are also becoming less affordable as the average price for a gallon of gas approaches $4.

While retailers could previously count on healthy spending from wealthier households to make up for broader weakness, the war in Iran could disrupt that trend. Middle- and high-income consumers with stock market wealth displayed “particularly large drops in sentiment” in March amid rising gas prices and share-price volatility, according to the University of Michigan. That could flag the start of more conservative consumption patterns from affluent households, which may weigh on retailers’ growth prospects.

Go further: See our Live FAQ: The Marketing & Commerce Impacts of the War in Iran on North America.