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By Jasmine Laws
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Conflict in the Middle East is rippling through the oil industry and into consumer goods, with analysts warning bottled water prices could rise in the coming months.
The United States and Israel launched coordinated strikes on Iran on February 28, after which Iran imposed restrictions on shipping through the Strait of Hormuz, a key global oil transit route that typically carries about 20 percent of the world’s oil and liquefied natural gas. The disruption has pushed Brent crude oil prices up by more than 50 percent since the start of March, and analysts warn higher energy costs tend to feed quickly into plastic production—raising the risk that bottled water prices will rise for U.S. consumers. Nearly nine in 10 Americans buy bottled water, and almost one in five rely on it exclusively, according to 2024 industry data.
Patrick Penfield, a professor of supply chain practice at Syracuse University, told Newsweek that he would expect to see "at least a five percent increase on plastic bottled drinks in general for the month of April."
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"If we continue to see oil prices climb to $125 to $150 a barrel, it could double to 10 percent in May and if oil reaches $200 a barrel, we will see a price increase of 25 to 30 percent," he added.
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Drinking water prices in India have already risen by around 11 percent, according to industry figures, driven in part by higher energy costs following the disruption.
Plastics used in bottled water packaging are closely tied to energy markets: ethylene, a key component of plastic resins, is derived from ethane, which comes from natural gas, Kenneth Gillingham, a professor of economics at Yale University, told Newsweek.
As a result, packaging costs have surged. The price of packaged drinking water has risen to 20 rupees per liter after the cost of plastic packaging materials jumped by more than 70 percent in recent weeks, Angelo George, CEO of Bisleri, India’s largest bottled water company, told Reuters.
The U.S., though, produces most of its own ethane, according to data from the U.S. Energy Information Administration, so may not see price hikes as quickly or as dramatically.
"There might be a slight upward pressure on bottled water prices in the U.S., but not a substantial one, such as in India,” Gillingham said.
Michael Dall, associate director of Pricing and Purchasing at S&P Global Market Intelligence, told Newsweek that the higher prices rippling through the industry are "unlikely to have been fully passed through yet to U.S. food and beverage packaging, primarily because over 90 percent of plastic bottle manufacturing occurs inside of the U.S. and there is little exposure to the import market."
That said, he warned prices could still go up "since global polymer prices (polyethylene and polypropylene) have soared since the outbreak of the war. This will inevitably be reflected in plastic bottle prices in the U.S."
The same thing happened after the outbreak of the Russia-Ukraine war in 2022, Dall said. "In this instance, it took about one month for the upward pricing impact to begin to register in plastic bottle manufacturing. However, it wasn’t for another three months that the largest of the price increases occurred."
"Our assumption is this will follow a similar path," he said.
Some experts are already seeing the impact of the Iran war on the plastic bottle industry. Matt Slutzker, a principal analyst at Wood Mackenzie, told Newsweek that "we’ve already seen price increase announcements from prominent plastic producers and prices have jumped a little more than 30 percent between late February and now for food and beverage bottle-resin which is largely polyester or [polyethylene terephthalate (PET)] resin."
"Those food and beverage brands will look to pass along those costs within their products," he said. This means that Americans can "definitely expect bottled water prices to increase in the U.S. as a result of the Iran War," he added.
Slutzker said that consumers will likely see the effects of these price increases in April, as "most major plastic converters who heat the resin and mold it into bottles faced these prices increases in March, so that product will hit the shelves in April now that most of those companies have already used their lower priced inventories." He added price hikes could "last throughout the peak consumption season in the summer."
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Thomas Duncan, a professor of economics at Radford University, told Newsweek that Coca-Cola and PepsiCo, two of America's largest producers of bottled water, have "already been warning of increased consumer prices to come in their own corporate filings."
In its 2025 annual report, PepsiCo said that it had “continued to experience volatility in our commodity, packaging and other input costs that may continue into fiscal 2026.”
Meanwhile, Coca-Cola, said in a 2025 filing that “unfavorable changes in economic conditions” could “negatively affect the affordability of, and consumer demand for, our beverages.” The company added that “certain markets in which our products are sold experienced high rates of inflation throughout 2025, which may continue in 2026.”
Newsweek contacted both companies via email for comment on Monday.
Duncan added that he has seen estimates of a 30 percent increase in bottled water production costs already, and that these price hikes will likely persist for some time even after the Strait of Hormuz re-opens as "it will take some time for production and distribution levels to return."
"Even companies that have a stock might start to creep up prices in anticipation of future costs," he said, adding that Americans may also start to buy more bottled water now, if they anticipate price hikes, meaning that the "increased demand will push prices up in current markets and deplete the stock faster."
In the weeks ahead, the key variable is how long energy prices remain elevated. While immediate price spikes are unlikely, prolonged pressure on plastic and packaging costs could translate into higher bottled water prices as summer demand ramps up, with any relief lagging until supply chains fully reset.
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