Americans don’t have to look much further than their local gas station to understand the economic impact of the war in Iran.

Over the last few weeks, the price of gasoline has risen more than 30% in some U.S. states. The national average cost of gasoline is now $3.98 per gallon, the highest it’s been in two-and-a-half years. The Stanford Institute for Economic Policy Research forecasts that the average American household will pay $857 more for gasoline over the rest of the year.

But it’s not just consumers feeling the impact. Promo companies, too, could start to see an impact on business operations. Counselor spoke with suppliers across the industry to understand how the conflict in the Middle East is impacting promo – from the rising cost of goods like plastic and polyester to looming surcharges on freight and last-mile delivery.

“The price of fuel is a potential disruptor for sure,” says Brandon Mackay, the president and CEO of Counselor Top 40 supplier SnugZ (asi/88060) and a member of Counselor’s Power 50 list of most influential people in promo. “I think [the rising costs] are going to be isolated to freight and LTL. Those are things that we can moderately absorb for a time being.”

$3.98
The current price of gas per gallon, as of March 25, 2026

What’s Happening in the Middle East

Less than a month ago, Israel and the United States launched air strikes across Iran, killing the nation’s Supreme Leader Ayatollah Ali Khamenei. In response to these missile strikes, the Islamic Revolutionary Guard Corps issued warnings to vessels that prohibited ships from passing through the Strait of Hormuz, thereby halting all traffic and oil experts from Gulf States from traveling through the waterway. The Strait of Hormuz is responsible for routing nearly 25% of the world’s oil supply.

This isn’t the first time Iran threatened to shut down the Strait of Hormuz, but up until now, the nation had never followed through.

“The Strait [of Hormuz] is closed. If anyone tries to pass, the heroes of the Revolutionary Guards and the regular navy will set those ships ablaze,” said a senior adviser to the Islamic Revolutionary Guard Corps on March 2.

The announcement sent global oil markets into chaos, fueling a rise in prices across the U.S. and the world.

But it doesn’t end there: Last week, Iran carried out a retaliatory missile strike on Ras Laffan, an energy complex in Qatar that produces approximately 20% of the world’s liquified natural gas (LNG), which is used to power factories and facilities around the globe.

“[Iran] has moved from stopping transit, which is a temporary measure, to attacking infrastructure, which has long-term effects,” David Goldwyn, a former U.S. diplomat and Energy Department official told The New York Times.

Even if the war ends tomorrow, it could take up to five years to build this facility back up to where it was before the attack.

“Qatar is not immediately going to be able to repair and start producing LNG again,” Patricia Cohen, global economics correspondent for the New York Times, said on The Daily podcast.

Implications for Delivery & Logistics

What does the war in Iran have to do with promo? As it turns out, quite a lot.

First, consider the mileage required to source and transport materials required to assemble a product. If gas prices continue to rise, suppliers may begin to see some added charges to freight and trucking costs.

“I think the first thing we’re going to start seeing in the coming weeks is transit price increases,” says Jackson Burnett, president of Hanahan, SC-based Vapor Apparel (asi/93396), which witnessed a barrage of transit cost increases in the months following the COVID-19 pandemic. “We’ve run this drill before.”

Now, a similar pattern has emerged: UPS slapped a series of fuel surcharges onto its existing cost as a result of rising gas prices, and shipping giant Maersk announced a weekly cost adjustment based on average fuel costs as reported by the Department of Energy.

Depending on how long the conflict in the Middle East lasts, experts say more transportation and logistics companies could follow suit.

“We expect more such announcements until oil prices cool meaningfully from four-year highs,” Raymond James Investment Strategy Analyst Pavel Molchanov told USA Today.

It’s one reason Joel Freet, CEO of Counselor Top 40 supplier Cutter & Buck (asi/47965) believes in the power of planning ahead. The Renton, WA-headquartered apparel supplier, which operates half of its business in retail and the other half in promo, hasn’t noticed a significant promo impact, but some areas of its retail business have taken a minor hit. That’s because, he says, consumers are spending less than they once did.

“Retail seems to be a bit more sensitive to consumer spending than promo,” Freet says. “Promo remains strong, but we’ll be keeping a close eye on everything.”

Over the last several years, Cutter & Buck has taken steps to increase efficiency across the supply chain, which Freet says will help them weather any storms that may come their way as a result of fluctuations in fuel pricing. In January, the supplier announced plans to open a new distribution center in Dallas, TX, bringing goods closer to customers.

“This will help relieve freight zone charges, and the network will provide lower transportation costs overall,” said Freet. “We can’t do much about the overall high fuel prices, but we’re working to absorb those things with shorter freight coverage.”

Freet added that there’s an added benefit to these freight efficiencies: sustainability.

“Freight consolidation isn’t just good for your pocketbook; it’s good for the planet, as well,” he says. “Sure, it does take time to say, ‘Hey, let’s share a ride. Let’s consolidate a freight,’ but doing so saves on emissions and it also saves dollars in the supply chain.”

But it’s not just ground transportation that is impacted by the rising cost of fuel. Dilip Bhavnani, COO of Counselor Top 40 supplier Sunscope (asi/90075) says air freight costs have doubled over the last few weeks in Bangladesh, where the supplier does a lot of its shipping. He’s also witnessed an increase in sea freight since the start of the war in Iran.

“Our distributors are incredibly resilient. Even in the scariest of times, I’m still incredibly bullish on promo.” Brandon Mackay, SnugZ (asi/88060)

And then, of course, there’s the shortened supply of LNG, which powers many of the facilities in Asia that the promo industry relies on to produce its goods. This is also an area that could be a boon for sustainability. As the LNG supply decreases and the price of this resource increases, some factories and facilities could begin turning to alternative energy sources.

“These crises regularly occur,” James Bowen of the Australia-based consultancy, ReMap Research told U.S. News & World Report. “They are a feature, not a bug, of a fossil fuel-based energy system.”

Bhavnani has heard rumblings about the potential impacts of a LNG shortage on countries in Asia, though he hasn’t seen an impact just yet.

But when he looks at what’s happening to consumers in places like India and Bangladesh, he says it’s a stark foreshadowing of what’s to come.

“Restaurants and hotels are shutting down, and many buildings in these countries rely on old infrastructure, which means they cook using propane gas,” he explains. “With the fuel shortage, this means the people who are working in these factories are going hungry, which also impacts productivity. We need to make sure the workers in our factories are well looked after.”

Material Cost Changes

It’s not simply transportation and factory electricity that could take a hit due to the war in Iran. If fuel costs continue to spike, it could become harder and more expensive to make promo products that depend on plastic, such as water bottles, packaging and even apparel.

60%
The share of apparel that relies on polyester(Fibershed)

According to a report from sustainable apparel nonprofit Fibershed, more than 60% of garments being sold today rely on polyester, a plastic-based synthetic textile. Polyester is derived from petroleum, which means that when gas prices rise, so do fabric costs.

The price of polyethylene terephthalate (PET), the resin used in fiber and containers for liquids and food, spiked 3 cents per pound, according to PlasticsToday.

These price increases could present some challenges for apparel suppliers like Vapor Apparel, which focuses on sublimation. “All of our products are polyester or polyester-spandex blends or just poly-rich,” explains Burnett, who also began his career at a large polyester yarn provider.

“This conflict has impacted more than 40% of our purchasing.”Dilip Bhavnani, Sunscope (asi/90075)

He added that when PET prices are up, orders slow down. “People are saying, ‘We’re just not going to buy right now and we’re going to hope for a swift conclusion to the conflict [in Iran],” he says. “That means that feeder stock and PET inventory levels are probably going to go up because they’re getting fewer orders.”

He noted, however, that in many ways, it’s too early to tell what the true impact on promo will be. “This conflict is three weeks old, so it’s very much a blip right now,” he adds. “But if this continues and inventory starts to get low, people are going to have to buy at that higher price. As an apparel manufacturer, our mills buy polyester fabric and yarn, so I’d expect we’ll start seeing these price increases in 60 to 90 days.”

Bhavnani, on the other hand, is already seeing price increases on raw materials.

“When you consider apparel, bags and socks in the promo industry, those all rely on oil and gas,” he says. “This conflict has impacted more than 40% of our purchasing.”

Burnett added that many of Vapor’s factories aren’t even trying to buy fabric right now. “They’re not even asking to buy at this moment because if you ask right now, you’re going to get quoted at a high price,” he explains. “Everyone’s just eating through their current inventory waiting for the conflict to get resolved.”

“If this is still unresolved by midsummer, that’s going to have a big impact on prices for 2027.” Jackson Burnett, Vapor Apparel (asi/93396)

Despite some of these headaches, Vapor Apparel doesn’t plan to increase prices – at least not yet. “For this year, we had orders placed by August and September. The stuff that’s in our inventory and on the sewing floor right now was ordered back in 2025. But if this is still unresolved by midsummer, that’s going to have a big impact on prices for 2027.”

Mackay encourages distributors to get their orders in ahead of time during this era of uncertainty. “If you have something that’s incredibly price sensitive, you need to get those things in sooner than later,” he advises. “It’s just like in the traditional consumer world … you’ve got to get out there and get your foot in the door and you’ve got to buy goods ahead of the curve. The same goes for promo.”

Earlier this week, Moody’s Analytics raised its recession outlook to 48.6%, with its Chief Economist Mark Zandi warning that a recession could be on the horizon.

“This still isn’t a recession, but given how fragile the [U.S.] economy was even before the conflict began, not much else would have to go wrong in the Middle East to precipitate a downturn,” he posted on X.

Weathering the Storm

Rising inflation, tariff uncertainty and worsening consumer sentiment have presented some real challenges to promo companies over the last few years.

But even when the economy is at its worst, the promo industry remains bullish – and in some cases, revenue is hiding where you’d least expect it. During the financial crash of 2008, for instance, Vapor Apparel saw significant business growth.

“Instead of hopping on planes and going to Europe or taking these big expensive trips they could no longer afford, people packed up the family truck and went to national parks,” Burnett says. At the time, Vapor Apparel was sold at national park stores, so the rise in domestic tourism drove increased business for the supplier. National park travel spiked again in 2020 during the COVID-19 pandemic, when fewer people could travel internationally.

In unprecedented times, it can be useful to look at consumer behavior, and what destinations and activities they’re spending their time and money on.

Often, there’s a promo product (or several) to go along with it.

“Our distributors are incredibly resilient,” says Mackay. “Even in the scariest of times, I’m still incredibly bullish on promo.”