Small businesses were already being squeezed by tariffs. Now, the Iran conflict is pushing them to the edge as rising oil prices drive up shipping costs

(SeaPRwire) –   Three weeks into the Iran conflict, small businesses are beginning to feel the strain of the war, and experts warn that the most severe impacts could still lie ahead. 

In the wake of the first strikes on Iran in late February, U.S. businesses have felt direct effects from the war: shipping delays and surging oil prices, which have pushed gas prices upward. 

These challenges arrive as small businesses have navigated the volatile swings of President Trump’s tariff policies over the past year. Broad tariffs on imports from China, Canada, Mexico, the European Union, and other nations have raised input costs and tightened profit margins for small business owners—who typically don’t have the buying power or legal support that big corporations do. 

Brett Massimino—associate professor at Virginia Commonwealth University’s business school and chair of its supply chain management and analytics department—notes that unlike large corporations, which can absorb higher costs and shipping disruptions from the Iran war (at least temporarily), small businesses are much more vulnerable. 

“Small businesses don’t have the profit margins or financial reserves to absorb those kinds of cost hikes,” he told . “They’re stuck with a choice: either rush some of the shipments that are currently delayed, or cope with product shortages.”

If the Iran war drags on, small businesses might begin feeling even more severe effects within two months—either as they deplete their reserves or when they have to renew contracts at possibly higher rates. Trump has repeatedly claimed he could end the war “right now” because Iran’s military is weakened, as he told MS Now on Friday. However, Defense Secretary Pete Hegseth asked for an additional $200 billion for the war effort earlier this week.  

Brent crude oil briefly reached $119 a barrel on Thursday before falling back on Friday, as Iran continued to threaten (and occasionally attack) ships traveling through the Hormuz Strait—through which 20% of the world’s oil supply moves.

Meanwhile, the risk of attacks prompted shipping giant Maersk to suspend all vessel crossings through the strait. In early March, around 147 container ships in the region had to seek shelter after becoming stranded in the Persian Gulf.

‘Everything has gone up’

Even though these events might seem distant to Americans, they’ve already resulted in tangible price hikes for many local small businesses across the country. 

Travis Maderia—fourth-generation lobster fisherman and cofounder of Lobster Boys, a direct-to-consumer seafood company—told that the fishermen who catch lobsters for his business in the frigid North Atlantic waters near Nova Scotia, Canada, are dealing with higher costs. On Friday, he shared that one fisherman informed him gas prices had gone up by 60 cents per liter (over $2 per gallon).

What’s the outcome? Maderia has had to pay more per pound for lobsters from the fishermen than in previous years during this season: $17 per pound, versus the usual $13 or $14. This pushes up his company’s operating expenses. 

Higher jet fuel prices and increased demand for air freight (due to businesses moving away from risky cargo ship routes) have also caused airlines to hike their rates and shipping costs.

For Lobster Boys, these increases translate to higher shipping costs for sending products to the continental U.S. Maderia says his company has had to pass these costs along to the restaurants and grocery stores it supplies. But when those restaurants raise their prices for customers, demand drops—leading to fewer orders for Lobster Boys. 

“Unfortunately, everything has gotten more expensive, and customers aren’t happy about it,” he stated.