War could make petroleum products from clothes to crayons more costly

Key Points:

• The Iran war has caused a 10%-15% increase in costs for synthetic fibers like polyester and acrylic, which are petroleum-derived materials used in products such as stuffed toys, leading manufacturers like Aleni Brands to consider price hikes by early 2027 if the conflict continues.
• Petrochemicals from oil and natural gas are essential components in over 6,000 consumer products, including clothing, footwear, cosmetics, and medical supplies, making the war's impact on oil supplies a broad threat to production costs and retail prices.
• With oil prices above $90 per barrel, cost pressures are expected to ripple through supply chains, potentially increasing prices of goods like shoes by 1.5% to 3% by late summer and fall, as companies face higher expenses for materials, energy, and transportation.
• Some businesses are preemptively increasing orders to hedge against rising costs, while others plan price increases to offset higher material and production expenses, as seen in companies selling portable shower attachments and wound care products.
• While transportation costs may decrease post-conflict, industry leaders express skepticism that raw material prices will return to pre-war levels, indicating a possible long-term inflationary effect on products reliant on petrochemicals.