Rising Oil Prices Could Impact Fresh Produce Trade Latin America-U.S.

The recent surge in global oil prices following escalating tensions involving Iran is rippling through international supply chains. For the fresh produce industry, higher fuel costs could reshape trade through Latin America and the United States.

While the geopolitical conflict itself continues to evolve, the economic effects are immediate. From refrigerated shipping to fertilizer production, nearly every stage of the fresh produce supply chain is linked to energy markets.

Oil prices surge as shipping routes face disruption

Oil markets have reacted quickly with the global benchmark Brent crude climbing above $100 per barrel, marking its first return to triple-digit territory since 2022.

The rally has been driven largely by concerns over disruptions in the Strait of Hormuz, one of the most critical energy chokepoints in the world. Approximately 20% of global oil supply normally passes through the narrow waterway, making any disruption there highly consequential for global energy markets.

In the United States, gasoline prices have climbed to around $3.58 per gallon, while diesel, essential for trucking and agricultural logistics, has surged roughly 28% to $4.83 per gallon in just a month.

How higher fuel costs could affect Mexico–U.S. produce trade

Mexico is the largest supplier of fresh produce to the United States, making fuel price fluctuations especially relevant for cross-border trade.

According to the U.S. Department of Agriculture, Mexico accounts for more than 60% of U.S. vegetable imports and nearly half of fruit and nut imports. Key products include tomatoes, avocados, peppers, cucumbers, berries, and limes.

Most of these products travel by truck, crossing the U.S.–Mexico border through major entry points such as Nogales, Laredo, and Pharr. Because trucking dominates this trade corridor, rising diesel prices can have immediate impacts on transportation costs.

Even when diesel prices in Mexico have risen more moderately than in the United States, due to domestic policies, cross-border produce shipments remain exposed to higher transportation costs because trucking fleets and logistics providers ultimately respond to global fuel markets.

Also read: U.S. agriculture outlook for 2034: production, exports, and imports

Maritime and air transport disruptions could hit South American exporters

While Mexico’s produce trade depends heavily on trucking, exporters in South America rely much more on maritime and air freight to reach the U.S. market.

Countries such as Peru and Chile ship large volumes of fresh fruit by sea using refrigerated containers. These containers require continuous cooling throughout long ocean journeys, making them particularly sensitive to rising fuel prices.

Shipping companies report that fuel can account for 50% to 60% of a vessel’s operating costs, and marine fuel prices have climbed significantly as oil markets tighten.

For exporters in Peru, Chile, or Colombia maritime freight is critical for products such as blueberries, grapes, cherries, and avocados that travel thousands of miles to reach North American markets.

Fuel costs are also beginning to rise domestically in parts of South America. In Peru, diesel prices have recently increased by around 4–5% in some markets, averaging about $1.19 per liter.

How this impacts produce prices in the U.S.

Although these disruptions begin with energy markets and shipping routes, the effects ultimately reach consumers. Higher fuel prices raise the cost of moving goods across the supply chain, affecting exporters, distributors, and retailers involved in the produce trade.

Transportation is already one of the largest cost components in fresh produce supply chains. With diesel and marine fuel prices rising, logistics costs increase, thus putting additional pressure on exporters and distributors whose margins are often relatively thin.

The USDA had already projected that retail fresh vegetable and fruit prices in the United States could rise by up to 1.4% and 0.2%, respectively, in 2026, so these additional logistic disruptions could push increases even further.

Financial tools to navigate supply chain volatility

Periods of market volatility can create additional financial pressure throughout the produce supply chain.

Growers and exporters often face rising logistics and input costs months before they receive payment for shipments. When transportation costs spike unexpectedly, maintaining stable cash flow becomes even more important.

Solutions that accelerate payments for delivered produce can help suppliers maintain liquidity, manage operating costs, and navigate uncertain market conditions.

ProducePay’s Quick-Pay solution allows growers to receive payment for their shipments right after delivery rather than waiting through traditional payment cycles. Faster access to capital helps businesses continue operating smoothly even as market conditions shift.

Sources:
The National News, AP News, Global Petro Prices, Bloomberg Linea, More Than Shipping