Rising oil prices can increase food costs – but hoarding groceries “makes it worse,” an economist says.

Rising oil prices tend to drive up grocery costs, but that doesn’t mean consumers should rush out and save money, economists say.

Brent crude has soared above $100 a barrel in recent weeks – after trading near $60 in January – as Iran’s war worsens the Strait of Hormuz, which transports a fifth of the world’s oil.

Higher oil prices can raise costs throughout the food supply chain, from agricultural fuels and fertilizer production to transportation and refrigeration, according to the Federal Reserve Bank of St. Louis.

Many consumers are already responding: About 48% say they are buying certain items in bulk because they expect prices to rise, according to a survey of 1,000 US adults conducted on March 9, 13 by ecommerce platform Omnisend.

But that kind of behavior can cause chaos, economists say, by creating spikes in demand, straining supply chains and putting more upward pressure on prices.

At the same time, changes in input costs – such as rising oil prices – do not reach consumers all at once.

Another price increase could appear within weeks, especially for perishable goods, says David Ortega, a food economist and professor at Michigan State University. But the broader impact tends to build slowly and unevenly, rather than overnight.

“This won’t happen overnight,” Ortega says. The full impact of high oil prices on grocery costs could take months and could play out for years, he says. If the spike is temporary, the impact on grocery prices can be mitigated, because increases tend to occur when high oil costs continue for months, Ortega adds.

While oil prices can move quickly, grocery prices often don’t follow suit, leaving little reason to rush out and stock up. Instead, those costs move through many stages of the food system, making their impact on grocery prices slow and indirect.

“A 10 or 20% increase in the price of fuel or gas… will not translate one to the other to an increase in the grocery store,” says Ortega.

Those costs are slowly passed through supply chains before they appear on store shelves, according to a 2025 analysis from the Federal Reserve Bank of Kansas City.

One reason is because energy is one of the many inputs into the food system. According to the United States Department of Agriculture, direct energy costs make up only three cents of every food dollar.

Those three cents it only shows the consumption of fuel and electricity itself. While other parts of the food dollar — such as transportation, storage and food preparation — also depend on energy, those costs are more indirect and tend to show up gradually in the consumer price, Ortega says.

And manufacturers don’t pass on high costs right away. Andrei Quinn-Barabanov, the leader of the supply chain industry at Moody’s, says: “The increase in prices is slow and often due to the determination that prices will rise.

Since many food products are in a highly competitive market, companies also have the opportunity to reduce high costs in subtle ways – such as offering fewer promotions or sales – rather than directly raising prices, he says.

Because price increases are slow, rushing to buy groceries is unlikely to save much money — and if more people do it, it could put upward pressure on prices, experts say.

“I think it’s not very helpful. It makes the situation worse,” Ortega says.

When consumers buy more than usual, it can disrupt supply chains that rely on tightly controlled inventories and create the appearance of shortages, he says. Supply chains are generally built to handle short-term disruptions, but sudden spikes in demand can overwhelm those processes and lead to empty shelves.

“You don’t want to turn a supply problem into a consumer or demand issue,” says Ortega. “If there’s increased demand for a certain commodity, that certainly puts upward pressure on prices.”

If high oil prices continue for months, however, the impact could be more pronounced at the grocery store, he says.

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