Oil tops $100 as back-to-school costs, groceries, and gas prices rise

Oil prices surged past $100 a barrel on July 23, 2026, driven by renewed Middle East conflict, pushing U.S. gasoline to a national average of $4.09 per gallon. Analysts warn pump prices could climb further in the coming weeks, with some projections suggesting a national average between $4.25 and $4.40 per gallon for regular gasoline and diesel reaching $5.35 to $5.50 per gallon. The spike follows a brief lull in hostilities between the U.S. and Iran in June, marking Brent crude’s return to triple digits for the first time since May. Higher fuel costs are rippling through the economy, increasing transportation, grocery, shipping, and travel expenses. Companies across sectors report implementing surcharges, adjusting forecasts, and facing weaker consumer spending as energy markets remain disrupted. “Since everything relies on petroleum in our economy, for good or ill, if the cost of petroleum goes up, then everything else goes up as well,” said Joe Adamski, managing director at procurement services firm ProcureAbility. Gasoline demand remains resilient despite higher prices, rising 1% to 8.9 million barrels per day last week, according to the U.S. Energy Information Administration. Grocery prices are under pressure as diesel fuel powers farm equipment and refrigerated trucks transport perishable goods like fresh produce and dairy. “Oil at $100 doesn’t make food prices jump right away, but it does put upward pressure across the food supply chains, especially for categories that depend heavily on trucking, cold storage and packaging,” said Miguel Gomez, director of Cornell University’s Food Industry Management Program. Imported goods, such as olive oil, are particularly vulnerable due to elevated shipping costs. Albertsons lowered its fiscal 2026 outlook on July 23, citing pressure on its grocery business and reduced consumer spending. Shipping services have introduced fuel surcharges as diesel prices surged 51% in the second quarter compared to January and February, while jet fuel prices rose 90% year-over-year, according to AFS Logistics and TD Cowen Freight Index data. Truckload pricing has hit a four-year high amid rising fuel costs and capacity constraints. Smaller carriers may temporarily park trucks until fuel prices ease. Retailers are also feeling the pinch. Tractor Supply Co. reduced its annual sales outlook, noting that higher fuel prices during the spring selling season weighed on customer spending, particularly among those driving long distances in diesel-powered pickup trucks. “Our customers often drive longer distances to shop frequently in pickup trucks, many of which are diesel-powered, making them especially sensitive to higher fuel costs,” said CEO Hal Lawton. Consumers are consolidating shopping trips, prioritizing essential purchases, and curbing discretionary spending. The Footwear Distributors and Retailers of America warned on July 22 that increasing freight and material costs could lead to higher prices for back-to-school items. Analysts suggest pump prices may continue rising in the near term, though oil futures for later this year and 2027 indicate potential relief once military actions subside.