Zohaib Zahir

Associate Editor

Loyola University Chicago School of Law, JD 2027

On February 28, 2026, a conflict involving the United States and Iran began when coordinated airstrikes targeting Iranian military and nuclear infrastructure took place. In response, the Iranian military launched retaliatory missile and drone strikes targeting U.S. bases and U.S. allied countries Qatar, Saudi Arabia, and the United Arab Emirates. Alongside these military strikes, the Iranian government has taken de facto control over the crucial Strait of Hormuz. The Strait of Hormuz is a narrow waterway in the Middle East that borders Iran. The strait connects the Persian Gulf to the open ocean and is a key export pathway for oil and gas to many countries across the world. It is estimated that 20% of the world’s oil supply flows through the strait. With exports through the strait now significantly disrupted, global energy markets have begun to experience a sharp supply shock. Corporations, particularly in the energy, transportation, and manufacturing sectors, are now facing heightened regulatory scrutiny and compliance risk as they attempt to navigate significant cost pressures and operational uncertainty.

Impact on corporations

Corporations operating within the energy, transportation, and manufacturing sectors have been among the first to absorb the immediate effects of the oil supply disruption. As input costs, such as fuel, electricity, and natural gas rise, and supply chains become increasingly unreliable, corporations face mounting pressure to maintain operational continuity while preserving margins. In the month of March, the national average price of gasoline per gallon in the U.S. increased by roughly 30%. Goldman Sachs economists anticipate that a disruption in fertilizer supplies due to the current conflict will drive up U.S. food prices by roughly 1.5% in 2026. The airline industry has also faced significant route disruption and increased transportation costs due to rising jet fuel prices. Prominent airlines such Emirates, Etihad, and Qatar airways have seen at minimum a 50% reduction in daily flights, resulting in an estimated daily loss of $200 million in revenue.

What corporations are doing now

Corporations are implementing a range of strategies to navigate the current conflict. Many corporations are pursuing measures aimed at mitigating consumer impact, such as delaying price increases, offering targeted discounts, or implementing loyalty incentives. For example, many airlines have offered free date changes as well as options for full refunds. DoorDash has implemented a relief program which weekly payments to eligible drivers. Under the program, drivers who drive at least 125 miles per week can receive payments starting at $5 to help offset the costs associated with gas prices. Further, some corporations have begun to implement supply chain adjustments through rerouting shipments, alternative sourcing, and more conservative inventory management. Amazon has advised customers of Amazon Web Services (AWS) to migrate their applications to alternate AWS regions and has assisted many its users to do so. Google and Nvidia have had to temporarily close their Middle East campuses as the conflict continues.

What corporations might do in the future

While many corporations have been hesitant to pass the increased costs directly onto consumers, sustained input price pressures and lower profit margins will compel many corporations towards cost pass throughs. Experts anticipate that in the agriculture industry, rising fertilizer and transportation costs will translate into higher wholesale prices that will lead to higher grocery prices for consumers. Energy-intensive industries have faced elevated production and logistics expenses that will erode margins and be passed on to consumers, leading to higher energy bills. These costs, alongside anticipated continued increases in feul prices , will likely place substantial and sustained pressure on consumers.

Price gouging concerns

Price gouging is the practice of raising prices on essential goods or services such as food, fuel, or housing to an unfair or exorbitant level, and is seen typically during declared emergencies or natural disasters. Notably, there is no federal law against price gouging. However, many states forbid it  as to essential supplies. Price gouging laws are most often implemented to combat excessive increases in gasoline prices, but the laws can be applied to essential goods such as groceries. Penalties for illegal price gouging activities vary by state and can range from moderate or severe fines to prison.

Even where increases are cost justified, corporations will face scrutiny from state regulators and consumer protection authorities if price increases are perceived as excessive or inconsistent with market conditions. With a variety of corporations now facing tough decisions as the conflict continues, organizations must ensure that any upward pricing adjustments remain justified, as deviations beyond cost justifications will expose them to heightened scrutiny under applicable price gouging and consumer protection regulations.