Rising Fuel Prices Squeeze US Small Businesses

American small businesses are facing increased operational pressure as rising fuel prices, driven by the conflict between the United States, Israel, and Iran, impact import costs, logistics, and profit margins.

The geopolitical tensions have sent oil prices above $100 per barrel and interrupted global supply chains. For many small enterprises, these costs are manifesting as higher freight rates and increased expenses for raw materials.

Wonderstate Coffee, a Wisconsin-based coffee roaster, reports that its import rates have risen by 5% to 8% due to soaring fuel prices. Co-owner Caleb Nicholes stated that shipments from Ethiopia now require additional insurance and rerouting because shipping vessels have been targeted in previous years.

Nicholes noted that these expenses may impact our profitability in a way that will be difficult to recoup this year.

Supply Chain Mitigation Strategies

To combat the instability of fuel costs and supply chain risks, some businesses are altering their procurement timelines. Bogg, a manufacturer of tote bags made from imported plastic, has committed to purchasing products six months in advance.

CEO Kim Vaccarella described this timeline as atypical for the business and noted that it paces ahead of customer order forecasts, but characterized the move as necessary to mitigate supply chain risk. The company is also reviewing the timing of future product launches based on when materials become available.

Rising Costs in Logistics and Delivery

The surge in fuel prices is creating a ripple effect across industries that rely on the movement of goods, including trucking, farming, and local delivery services.

John Andrews, a South Carolina-based chef who operates a meal delivery service, drives more than 100 miles per week. Andrews reported a double whammy of high food prices and climbing gas costs. While his pre-made meals, such as pepper steak and lemon garlic chicken, are currently priced at $17 each, Andrews indicated This proves only a matter of time before he raises those prices.

In the trucking industry, owner-operator Edin Nuratovic reported that a single fill-up can cost $300. Similarly, farmers are facing increased costs for both fuel and fertilizer, which industry veteran Mike stated has skyrocketed.

Market Data and Price Trends

Data from AAA indicates a significant upward trend in fuel costs during the first quarter of 2026. As of March 5, 2026, the average US gas price reached approximately $3.25 per gallon, an increase of more than 36 cents from the February 2026 average of $2.89.

Diesel prices, which are critical for the trucks delivering commercial goods, saw an even sharper increase. According to AAA, diesel prices rose approximately 11% in a single week leading up to March 5, 2026, reaching $4.16 per gallon from a previous average of $3.76.

Business Adaptation and Consumer Impact

While many are struggling, some businesses have insulated themselves through operational efficiency. Brent Valentine of Heartwood Tree Company in Madison, Wisconsin, manages a fleet of a dozen trucks and various gas-powered equipment. Valentine stated his business has not felt a significant impact because the company schedules jobs close to one another to minimize driving distances.

However, for most small business owners, the pressure is mounting. Richard Trent, executive director of the Main Street Alliance, which represents approximately 30,000 small business owners, stated that members are grappling with rising delivery costs, supplier fees, and the cost of employees commuting to work.

Trent noted that even if key oil chokepoints like the Strait of Hormuz were to open, the effects of the war would be felt for months and months down the road as thin margins are squeezed.

Because small business owners are often in direct communication with their clients, they are now tasked with explaining the necessity of price increases to their consumers.