John Andrews, a chef in South Carolina, operates a meal delivery service. He estimates he drives over 100 miles each week to deliver fresh, home-cooked meals to his customers. "Food prices are crushing me, and now fuel costs are ridiculously high," Andrews said. "It's a double whammy. I'm working just as hard as ever, but I'm losing money." The situation of high operating costs and weak consumer demand has persisted for years. With the escalation of conflict between the U.S. and Iran, oil prices have climbed again, placing new pressure on the small businesses that form the backbone of the U.S. economy and provide the majority of its jobs. Data from the American Automobile Association (AAA) shows that the national average price for gasoline was approximately $3.25 per gallon on Thursday, an increase of more than 36 cents from last month's price of $2.89. The price increase for diesel fuel, which powers large freight trucks, is even more significant: the average price surged from $3.76 a week ago to $4.16, a jump of about 11%. For businesses like Andrews's that rely on vehicles and deliveries, the Middle East conflict is directly eroding profit margins through rising fuel costs. Although Iran has long been under sanctions, its oil continues to flow to buyers like China. This supply disruption has pushed up global oil prices, which are directly reflected in the prices at the pump. Andrews's company offers prepared meals for two, such as lemon garlic chicken and steak with peppers, priced at $17 per meal. He says a price increase is only a matter of time—the last time he raised prices was two years ago, when high inflation significantly drove up food costs. "Most of my clients are elderly; I can't keep raising prices on them, they can't handle it," Andrews said. "But right now, I'm literally not making any money."

"Everything is Getting More Expensive" Even before the outbreak of the Iran conflict, many small businesses were already struggling. A Federal Reserve report on small businesses released this week showed: * In 2025, more small businesses reported a year-over-year decline in revenue than reported an increase. * Expectations for revenue and hiring growth over the next 12 months have fallen to their lowest level since 2020.

Kim Williams, owner of "Fantasy Florist" in Burbank, California, carefully plans delivery routes to save on fuel. Over the past year, several of her suppliers have raised prices due to tariffs. Sometimes she can find cheaper alternatives, but more often she has to pass the increased costs on to her customers. "I feel like it's the norm; everything is getting more expensive," Williams said. "All of our costs are going up, like insurance and workers' compensation." Her experience reflects a common trend: Federal Reserve research indicates that the most frequently cited financial challenge for small businesses is rising costs for goods, services, and wages, forcing many to transfer these costs to consumers. Nearby, Hollywood Bus Tours takes tourists through famous Los Angeles movie studios and upscale neighborhoods, a must-do activity for visitors. However, founder Chris Lessing says business has noticeably declined. Last year's local wildfires and tighter federal immigration policies cooled tourism, leading to a significant drop in passengers for his 12 buses. "Most of the tourists are foreigners," he said. "Occasionally there are locals, but the vast majority come from far away." Gasoline is one of Lessing's biggest expenses. So far, he has not raised his prices, choosing to absorb a portion of the cost increase himself. "We're worried not just about gas prices, but also the global political situation that comes with it," he said. "Some people simply don't want to travel to the U.S. Combine gas prices with that factor, and it's a really bad situation."

Ripple Effects Karim Miller started his own trucking company, "Strong Pact Trucking," in Chicago about three years ago. Today, he owns three trucks that collectively travel about 1,200 miles per day. Like the vast majority of large trucks, his vehicles run on diesel. "I've seen diesel prices fluctuate, but never spike this fast; it's terrible," Miller said. Miller estimates the recent sharp price increase has cost him an extra $100 in fuel expenses this week alone. His company primarily transports construction materials. If diesel prices continue to rise, he will have no choice but to increase his shipping rates. Many small businesses depend on trucking companies like his to move goods across the country. Once shipping rates increase, these higher costs are passed along through more expensive prices for goods. "Where does this price hike end? Because it affects the entire economy," Miller said. "The trucking industry is a microcosm of the whole economy."