Hormuz Strait Closure Drives Up Costs, Major Companies Gradually Raise Prices

GeopoliticsMacroCommodity Impact 5
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Summary · why it matters

The closure of the Strait of Hormuz due to the Iran war is pushing raw material and shipping costs higher, leading many manufacturers to gradually raise prices on goods ranging from beer, house paint, and potato chips to packaging. The Wall Street Journal reports that companies that have announced or are preparing price hikes include Boston Beer Company, Sherwin-Williams, International Paper, and Unilever, aiming to offset rising raw material costs. U.S. crude oil futures traded near 85 dollars per barrel on Friday, up about 25 percent from the start of the war, while the average U.S. gasoline price has risen to about 4.11 dollars per gallon from 2.98 dollars per gallon at the onset of the conflict. Sherwin-Williams is set to raise prices by 8 percent starting September 1 to offset raw material costs linked to oil prices, and following the announcement, its stock price rose more than 8 percent. The impact could exacerbate U.S. inflation and complicate the Federal Reserve's monetary policy, as investors had previously expected the Fed to cut interest rates, but after energy prices surged due to the war, the market is increasingly pricing in the possibility that the Fed may resume raising rates.

Impact on stocks 4

Consumer Staples▲ · 2 stocks
Unilever PLC
UNLYD
▲ PositivePricingrelevance

Unilever is raising prices to offset higher raw material costs.

Critical Materials & Supply Chain▲ · 1 stocks
Sherwin-Williams Co
SHW
▲ PositivePricingrelevance

Sherwin-Williams announced an 8% price increase starting September 1 to offset oil-linked raw material costs.

Materials▲ · 1 stocks
International Paper
IP
▲ PositivePricingrelevance

International Paper is raising prices to offset higher raw material costs from Hormuz closure.

Theme Impact 3

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