Amazon hits sellers with ‘fuel surcharge’ as Iran war roils global energy markets | News

The war in Iran has hammered global oil markets, with gas prices in the U.S. spiking significantly. Amid the rise in transportation costs, Amazon has instituted a new 3.5% fuel surcharge for sellers that use its distribution network. The policy has the potential to inflict significant new costs on the untold merchants that rely on the e-commerce giant to sell their products.

Amazon told News that the surcharge would be in place for the foreseeable future, although the company said it will continue to evaluate a potential policy shift as market conditions evolve. The news was originally reported by Bloomberg.

“Elevated costs in fuel and logistics have increased the cost of operating across the industry,” a spokesperson said. “We have absorbed these increases so far, but similar to other major carriers, when costs remain elevated we implement temporary surcharges to partially recover these costs.” The spokesperson added that the surcharge was “meaningfully lower than surcharges applied by other major carriers.”

The new policy will take effect on April 17 and will impact sellers who use the company’s Fulfillment by Amazon service, Bloomberg writes. Fulfillment by Amazon, commonly known as FBA, allows companies to send their products to Amazon’s warehouses, where they are packed and shipped to buyers. Amazon doesn’t disclose how many merchants use FBA, but the program underpins the vast majority of third-party sales on its platform.

Amazon first instituted this type of surcharge in 2022 — which, not so coincidentally, was the last time crude oil traded over $100 a barrel. What was happening in 2022? Russia had just invaded Ukraine, sending energy markets haywire. Today, the war in Iran — spurred by the Trump administration and the Israeli government’s assassination of the nation’s Supreme Leader — has similarly rocked markets.

Iran is strategically located along the northern border of the Strait of Hormuz — a narrow but critical shipping lane for global oil supplies through which roughly 20% of the world’s oil supply passes — and the country has sought to block shipping lanes there, a move that has majorly impacted energy prices throughout the world.