What crude oil volatility means for your business

April 14th, 2026

^Disclaimer:^{This is a developing story. The following analysis reflects market conditions at the time of publication.}

^{For advisory support tailored to your operation, Entegra’s supply chain and culinary experts are available to help you plan smarter through uncertainty.}

From seeds in the ground to food on your menu, the price of crude oil touches every part of the supply chain your business relies on. 20% of the world’s oil is transported through the Strait of Hormuz. But with ongoing geopolitical conflict in the region, oil price volatility has accelerated.

How will crude oil prices affect food inflation?

Historic data shows that while energy volatility matters, its impact on food costs follows recognizable patterns — and understanding those patterns can help businesses plan with greater confidence.

Related: The State of Procurement

Oil prices touch every stage of your operations

Rising fuel costs don’t stop at the pump. In fact, 12% of the total cost of food production is linked to energy, making it the largest cost driver aside from labor.

When crude oil rises, pressure shows up in a predictable sequence:

Agriculture: The cost of running farm equipment, producing fertilizer and moving raw commodities goes up.
Transportation: Diesel costs push freight rates higher and create strain on delivery timing and availability.
Production: Processing, freezing and packaging become more expensive as utilities and fuel costs rise.
Distribution: Warehousing, refrigeration and cold-chain logistics feel the squeeze.
Retail: Eventually, increased costs necessitate higher prices on your menu.

How today’s market compares to the food inflation crisis of 2022

In 2022, crude oil prices climbed as high as $94.8/bbl¹ WTI² after massive increases in 2021 and 2020. This resulted in 10% food inflation, the biggest jump in 40 years.

While that level of inflation left its mark on many businesses, it also confirmed a pattern economists have been tracking since the 90s — significant food inflation typically occurs one year after a major spike in the price of crude oil.

How you can navigate a volatile supply chain

The ongoing conflict has demonstrated the dramatic impact world events have on energy costs. This volatility ripples across the entire supply chain, shifting all prices — including the food and supplies you need for your business. What can operators do to both shore up their margins and also drive topline growth?

“In a volatile food market, protecting the fundamentals is what keeps a company successful,” says Bobbie Moorman, Entegra’s Director of Supply Management – Food. “Food safety and quality must be top of mind. No cost pressure justifies risk.”

While volatility means significant risks for your business, it’s also an opportunity to double down on quality while proactively locking in pricing with a group purchasing organization.

How crude oil volatility could impact your business

The link between oil prices and significant food inflation has been tracked by economists across decades — and the connection isn’t as close as headlines suggest. Bottom line: when oil-driven food inflation occurs, operators typically don’t feel the impact until the following year.

By understanding this pattern, operators can:

Plan more strategically: Stop reacting to short-term price swings.
Anticipate pressure points: Understand what conditions are necessary for significant inflation.
Buy smarter: Make purchasing decisions rooted in data, not emotion

For expert advice on how you can proactively manage volatility, inflation and supply chain disruption, contact us.

^Glossary^:
^1.^bbl^{: A common abbreviation for barrel of oil}
^2.^WTI^{: West Texas Intermediate, a crude oil benchmark used for pricing and trading in the U.S.}

^Sources^:
^{1. AES data report, 3/30}
^{2. AES data report, 4/8}

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