As Iran war drives up the cost of diesel, small U.S. businesses struggle to adapt

The national average price for a gallon of diesel fuel is currently $5.53, according to AAA, up by about $1.70 since before the war in Iran started in late February. Now, those increased fuel costs are starting to disrupt the finances of small businesses.

At West Plains Veterinary Supply in Springfield, Missouri, most customers are pet stores or farm stores. They sell cattle IDs, animal vaccines, a lot of dog food. “Pretty much everything that goes in or on an animal,” said WPVS accountant Joseph Babbitt.

The company owns a fleet of trucks to make deliveries and they all run on diesel. Since the war began, the company’s fuel costs have risen, on average, $5,000 a week, Babbitt said.

The company hasn’t raised their prices yet. But he said eventually they might have to.

Rising diesel prices have also affected George Peake, owner and operator of a 100-acre cotton, soybean, and pecan farm in central Georgia.

“We're actually in a kind of a major drought right now, and so diesel is a big part of our irrigation fuel. This has just added 30%, 35% to our fuel cost. And that's concerning,” he said.

But there’s another aspect to the war in Iran affecting Peake’s farm. It’s driven up the price of cotton, which he grows.

“That's because the big competition for cotton is polyester, which comes from oil. And so the increase in oil prices has inadvertently, really helped us,” he said.

When polyester goes up in price, there’s more demand for cotton.

“And I'm like, ‘Yes, people, quit wearing that doggone oil on your body!’ You know, wear cotton,” Peakes said.

In Annapolis, Maryland, commercial diver Bill Eubanks runs his own business, Harbor Diving Services. He repairs everything from small boats to large shipping vessels and said his worry is that high diesel prices will keep people from taking their pleasure boats out on the water.

“I need them to go out and break something up, sink, or you know, blow something up,” he said.

It’s just the start of the boating season, he said, so he’ll know in the next couple months whether he’s successfully navigated these uncertain waters.