WSJ: Oil Price Rise ‘Trickles Down to Everything,’ Even Your Potato Salad to Go

The headlines about high oil and gas prices seem far away from products like plastic wrap or lawn fertilizer. In reality, though, these everyday items need hydrocarbons to get made, and all across the supply chain, the struggle is on over who will bear the burden of higher costs.

“Oil trickles down to everything,” said Josh Lee, the financial chief for chemical distributor CJ Chemicals LLC.

Oil prices are surging again this week with major benchmarks topping $110 a barrel, and natural gas is rising too, especially in Europe and Asia where prospects for a cutoff of Russian supplies have spooked markets.

Everyday items like plastic food packaging are made from refined petroleum products.

Photo: Justen Williams for The Wall Street Journal

While many people feel the impact of high crude-oil prices most directly at the gas pump, companies in obscure corners of global supply chains watch the daily gyrations just as closely.

Tamashima Hoso, a company in western Japan, makes the little plastic containers into which supermarkets and convenience stores in its region put ready-to-eat food. It is typical of small players around the world, serving customers in its Japanese region and buying its materials from resin sheet makers that in turn get raw materials from big chemical companies.

Shigeru Aoki, an executive at the company, said his suppliers usually adjust their prices four times a year but it is customary for his company to do so only every six months. Just before Russia attacked Ukraine, he agreed with customers on a 7% to 8% increase.

“We would have asked for 15% if we had known about the Russian invasion,” said Mr. Aoki. “This is said to be a war between Ukraine and Russia. But this is a war for us as well.”

About the Author: Patriotman

Patriotman currently ekes out a survivalist lifestyle in a suburban northeastern state as best as he can. He has varied experience in political science, public policy, biological sciences, and higher education. Proudly Catholic and an Eagle Scout, he has no military experience and thus offers a relatable perspective for the average suburban prepper who is preparing for troubled times on the horizon with less than ideal teams and in less than ideal locations. Brushbeater Store Page: http://bit.ly/BrushbeaterStore

2 Comments

Centurion_Cornelius March 23, 2022 at 09:52

Yep–trickle down and trickle up.

Oil used for a slew of things: paints, polymers, adhesives, heck–even the makeup your DW or DG puts on her pretty little face! (My neighbor (or I should say ‘brown roots’ blonde), is already singing the blues about jacked up prices on her hair bleach she buys to look purty. It’s over and above her rant about the high prices that her BMW is costing her by only drinking the 94 OCT gasoline. I told her: “Playing the role always comes at a a price.” She’s ticked at me now…
A New Dark Ages March 23, 2022 at 20:54

The Long Marching civilization destroyers at Marxist U. are just loving it.
Others not so much but they are just smelly unwashed deplorable kulak untermenschen with no “expert” credentials.
Why, they don’t even know the difference between a man and a woman.
Demoralization complete and external enemies will pounce.