Oil prices surged above $100 a barrel on Monday, sending fresh tremors through an auto industry already battered by years of supply-chain disruptions.
The conflict in Iran threatens key resources, including oil, aluminum, and petroleum-based plastics that automakers depend on, compounding existing pressures from tariff costs and lingering post-pandemic supply fragility.
According to CNBC, about 20% of the world's oil travels through the Strait of Hormuz, according to the U.S. Energy Information Administration. The narrow waterway between Iran and Oman is a chokepoint for far more than crude. Refined products — ethylene, propylene, and various aromatics — also ship through the strait, meaning disruptions there ripple well beyond the gas pump.
GasBuddy analyst Patrick De Haan noted that gas prices in Iowa have risen above $3 per gallon, with two 12-cent increases nationwide in the past two weeks. While peak prices were higher in 2022, the speed of the current climb is what stings. De Haan also pointed out that diesel and jet fuel prices are rising, putting additional pressure on shipping and freight costs.
"I think it's the pace of the increases this week that's really catching Americans off guard, and that might be making them feel a little bit nauseous about the prospect of driving, getting out, road trips," De Haan said.
For consumers already stretched thin, rising fuel and freight costs could mean higher sticker prices on vehicles — or thinner margins for automakers absorbing the hit. The auto industry, with its more than century-long history, has weathered downturns before, but the current environment is uniquely layered.
Some estimate that about 30% of the parts on a car are plastic, and those plastics are derived from petroleum-based chemicals. Dan Hearsch, managing director at AlixPartners, emphasized that the Strait of Hormuz isn't just a crude oil corridor. "It's not just raw crude coming out [of the Strait]," Hearsch said. "There's a lot of refining capacity. So ethylene, propylene, a lot of the aromatics, also ship out of that region. Those are not ports that are well-connected over land. So it's kind of by ship or by not."
Aluminum is another vulnerability. Bahrain and the United Arab Emirates account for 9% of the world's total aluminum smelting, according to AlixPartners. The U.S. imports between 80% and 90% of its aluminum, and about 20% of those imports come from the Gulf region — a significant exposure point if shipping through the strait is disrupted.
The issue has sparked debate about whether the global supply chain can ever return to its pre-pandemic resilience — or whether automakers need to fundamentally rethink how they source materials. Hearsch offered a blunt assessment: "Since Covid, some very fundamental things seem to have broken." He described decades of relative stability that preceded the pandemic, a period when the global supply chain operated smoothly, and disruptions were "long cycle."
"It's not just perception," Hearsch added. "It's not just how it feels. These things are continually disruptive. There's no silver bullet for predicting or dealing with all of these crises, because they each have some unique thing that you would have to do differently. That's what we're experiencing."
The pandemic brought raw materials shortages, a microchip deficit, and oil spikes. The Ukraine war cut off an important source of wire harnesses. A second chip shortage erupted in 2025, linked to Nexperia and a trade standoff between the European Union, the U.S., and China. Each crisis demanded a different response — and each left scars.
Duncan Wood, a visiting fellow at the Wilson Center in Washington, D.C., offered a more measured outlook. He said there are reasons to think elevated oil prices won't persist indefinitely — and that oil will not rise to $200 per barrel, as some have speculated.
"Although the Strait of Hormuz is responsible for so much of the traffic, you will see other countries beginning to boost production," Wood said. "That will help. You've already seen the Saudis trying to move some of their production away from that channel to other outlets to world economies. Probably the Russians will try to replace a lot of the Iranian oil in the Chinese market."
Still, automakers are navigating this crisis while already paying out billions in tariff costs due to trade disputes — and while attempting two fundamental and interrelated transitions: making profitable electric vehicles and rolling out new hardware and software platforms. For investors and consumers alike, the message is clear: the auto supply chain remains fragile, and every new disruption tests an industry that hasn't had time to heal from the last one.