Oil prices are interrupting what was expected to be a better year in 2026. | Photo: Shutterstock.
Nothing Six Flags has come up with has anything on the roller coaster that oil prices went on this week.
On Monday, the price of oil skyrocketed to $120 per barrel, which sent stocks plunging. That afternoon, President Trump told CBS that he thought the Iran War would soon be over, which sent it back down again, to about $100 by that evening.
On Tuesday morning, oil was down to $90 a barrel. When Chad Moutray, chief economist for the National Restaurant Association, took the stage at the trade group’s public affairs conference that afternoon, it had fallen to $79. All of that was due to comments President Trump made to CBS saying that the Iran conflict was about over.
By the time Moutray’s presentation was over, oil was back into the mid-$80s.
These numbers matter to economists. Moutray’s projections for the economy this year are generally positive. But, as he said, if oil prices remain elevated for very long, that projection changes, and not in a positive manner.
And, indeed, almost like clockwork, the price of a barrel of oil has increased further since his presentation. On Thursday it was up another 10% and is back to $95.
The price of oil matters because much of the economy depends on the transport of goods from one place to another, and because how much consumers pay for gas can influence their spending.
As we noted earlier this week, gas prices can definitely influence spending by the kind of low-income consumers that have already been cutting back on dining out because of inflationary concerns.
The price of gas is up 11% over the past week, and 22% over the past month. That increase can be expected to pressure consumer spending if it lasts for long.
We are not experts on geopolitical conflicts and thank goodness for that. But it would seem to me that restaurant operators should hope for a short one, because the longer it goes on the longer those gas prices will remain high.
Gas prices do have an effect on restaurant sales, but that effect depends on the severity of the change.
And that impact is not just on the spending power of the consumer but on the cost to transport goods to restaurants, which is also not insignificant. A prolonged period of higher gas prices, in other words, would hit restaurants both on the cost and the revenue side.
Oil prices are increasing, of course, because of the U.S. attack on Iran, which has led to what is being called the “largest supply disruption” in history. That has kept oil prices high even as countries release strategic petroleum reserves to ease supply disruptions and lower the cost of oil.
The result sent stocks falling again on Thursday. The S&P 500 fell 1.5% on Thursday. It is down 2.5% so far this year. Most restaurant stocks followed suit.
It’s all another lesson in the realities of the current environment. It’s probably a good idea to expect the unexpected. Because that’s exactly what’s been happening over the past 18 months. Economists thought things would be better last year, too, and then came tariffs and the government shutdown. Now a war in Iran is thwarting this year’s improvement.
