Iran war pushes fuel costs higher for Long Island fishing fleets, farms and trucking companies

The owners of Montauk Inlet Seafood said they've seen fewer boats fueling up at the dock they own that juts into the Block Island Sound on the east end of Long Island.

The cause: Higher fuel costs spurred by the U.S.-Israeli war with Iran.

With New York’s layered fuel taxes — although commercial fishermen can apply for refunds  — it’s often cheaper and easier to fuel up in Rhode Island, said Amanda Jones, director of operations at Inlet Seafood, a fisher co-op that ships from 12 to 18 million pounds of fish per year. 

“Fuel is our largest operating costs, so we’re already seeing smaller margins,” said Jones. “What I predict that we’ll soon see is that New York is going to see a steady decline in fish being packed [in the state].”

A barrel of crude oil sold for roughly $70 a barrel before the United States and Israel launched the war against Iran at the end of February — but has soared since then. 

Oil prices again swung sharply this week as markets continued reacting to the war, highlighting how quickly instability in global energy markets can ripple through Long Island’s economy. On Monday, crude oil spiked to nearly $120 per barrel — the highest mark since at least 2022  — before falling back to around $90 a barrel, where it remained Tuesday.

But the relatively high price and ongoing volatility is still creating uncertainty for fuel-dependent industries here, including fishing, farming, trucking and food distribution, according to Newsday interviews with business owners and industry leaders. Rising oil prices have a direct impact on the production and price of gas, from the regular gas that fills most cars to the diesel fuel that heavy-duty  commercial vehicles, boats and farm equipment typically run on.

The average price of diesel on Long Island reached $4.83 a gallon Tuesday, up 90 cents compared to when the war broke out Feb. 28, according to data from AAA’s online fuel price tracker compiled by Newsday's library. The average price for regular gas on Long Island hit $3.39   on Tuesday, up 54 cents from $2.86 on Feb. 28.  

The war began Feb. 28 with U.S. and Israeli strikes on Iranian nuclear and military targets, prompting retaliatory missile and drone attacks by Iran across the region. Iran has also attacked ships and threatened tankers moving through the Strait of Hormuz — a key shipping lane that carries about one-fifth of the world’s oil supply. On Monday, President Donald Trump suggested U.S. operations were nearing their goals, even as military actions continued on both sides and Iranian leaders vowed the fight could continue.

If the conflict continues, sustained spikes and swings in oil prices could raise the cost of transporting food, harvesting crops and running small businesses — pressures that are already showing up at the pump and could increasingly hit Long Island households, experts said. 

For many businesses, the biggest challenge is navigating the uncertainty surrounding global energy markets.

“The only consistency is inconsistency,” said Frank Kenney, vice president of go-to-market strategy and enablement at Cleo, a Rockford, Illinois-based provider of supply chain software. “What you have to do is create a shield of agility so that you can react to whatever is going to come your way.” 

Even if geopolitical tensions ease, Kenney said supply chains may not quickly return to normal.

“Supply chains are surprisingly very, very brittle,” he said. “You don’t take out the leadership of a country and then say, ‘OK, we’re stepping back and everything is daisies.’ The world is going to be different.”

Where the costs hit first

Transportation and logistics companies are already seeing higher operating costs.

Eddie Phillips, logistics manager at Jar Cris Enterprises Trucking in Bohemia, said coast-to-coast runs have risen by about $1,000 each way.

Diesel costs, in particular, could impact what prices businesses charge for all manner of goods, said Robert Sinclair Jr., senior manager of public affairs at AAA Northeast.

“Everything is transported to its retail location by diesel burning trucks,” Sinclair said. “Food, clothing, cars, the things going to your local CVS.”

The fuel is also central to agriculture, where diesel-powered tractors and other equipment are essential during planting and harvest seasons, meaning food producers may also be feeling a pinch from increased costs that could trickle down to what local customers pay for food, he said.

For local farmers, fuel consists of around 20% of operating costs, said Bill Zalakar, executive director for the Long Island and New York City Farm Bureau, which represents farmers in Nassau, Suffolk and NYC. He said that greenhouses had already been relying on more fuel to get through a frigid winter.

Farmers in Suffolk County grow and sell around 60% of their products locally, which saves some money on transport, he said. 

“We’re a little bit luckier out here on Long Island," he said.

Still, higher fuel costs can ripple into other parts of farming operations.

Fertilizer prices can also rise alongside fuel costs because some fertilizers rely heavily on energy in their production, Zalakar said. 

At Stew Leonard’s, which operates grocery stores in East Meadow and Farmingdale, company leaders say they are monitoring fuel-driven cost pressures closely and aim to avoid passing on increases to customers if they can help it.

“Right now, we’re doing what we often do in situations like this — we’re sitting on our hands and waiting to see how the market settles,” said Blake Leonard, president of Stew Leonard’s Wines and Spirits, in an emailed statement. “If prices do move, we’ll do our best to keep any changes small and temporary.”