Hormuz Disruption Hits New York Drivers, Truckers, Homeowners Hard

The ongoing conflict involving the US, Israel, and Iran has had far-reaching effects on global oil markets, particularly in New York. Six months after the conflict began on February 28, the disruption in shipping through the Strait of Hormuz is still affecting oil flow, with the U.S. Energy Information Administration reporting that oil flow through the strait was equivalent to about 20% of global petroleum-liquids consumption in 2024.

According to Greg Nowell, an associate professor of political science at the University at Albany, the Strait of Hormuz is a critical waterway connecting the Persian Gulf and the Gulf of Oman. Alternate export routes have helped mitigate some of the shortages analysts feared at the beginning of the conflict, but the disruption still has a major impact on global oil prices and supplies.

The effects are visible in New York's gas stations, with AAA reporting an average regular gasoline price of $4.19 per gallon and an average diesel price of $5.73 per gallon. Robert Sinclair Jr., senior manager of public affairs for AAA Northeast, noted that the price of crude oil closely follows the price of gasoline.

For trucking companies, increased operating costs can have a ripple effect throughout the supply chain, reaching consumers in the end. The trucking industry provides nearly 328,000 jobs in New York, with small businesses operating on thin profit margins between 1.5% and 3.5%. Increased trucking costs can be passed on to consumers.

For home heating-oil customers, price swings come as colder weather approaches. Todd Danz, president of Family Danz Heating and Cooling, said his company's price for heating oil has fluctuated by nearly 30 cents per gallon over the course of several days, reaching a low-to-mid-$5 range this week.