Aluminum from Bahrain. Ethylene from the UAE. Crude oil through the Strait of Hormuz. The war in Iran is 6,000 miles from Michigan, but the bill just landed on Detroit’s doorstep — and combined commodity cost increases between Ford and GM could reach $3 billion this year, though some of GM’s costs stem from non-war factors like AI-driven chip demand, before Stellantis’s still-unquantified exposure.

Detroit’s major automakers are bracing for a combined commodities shock tied to the conflict, as rising costs for aluminum, steel, plastics, and paint cascade through supply chains and onto factory floors.

The numbers from the companies themselves are already stark. Ford Motor Co. said this week it faces $1 billion in additional commodity spending, driven by energy-intensive materials like aluminum and steel. General Motors expects $1.5 billion to $2 billion in incremental commodity and freight costs this year, though that figure includes DRAM memory chip price hikes driven by AI data center demand rather than the war. Stellantis has not quantified its exposure.

The Strait and the Supply Chain

About 20% of the world’s oil passes through the Strait of Hormuz, according to the US Energy Information Administration — a narrow shipping lane bordered by Iran and Oman. The World Bank puts the figure higher still: 35% of global seaborne crude trade. Attacks on energy infrastructure and shipping disruptions have triggered what the World Bank describes as the largest oil supply shock on record, with an initial reduction of roughly 10 million barrels per day.

Brent crude averaged $69 a barrel in 2025. The World Bank forecasts $86 for this year — and as high as $115 if the conflict escalates.

But oil is only the beginning. The Gulf region is a major producer of the petrochemical building blocks that become car parts.

“It’s not just raw crude coming out [of the Strait],” said Dan Hearsch, managing director at consulting firm AlixPartners. “There’s a lot of refining capacity. So ethylene, propylene, a lot of the aromatics, also ship out of that region. Those are not ports that are well connected over land. So it’s kind of by ship or by not.”

Roughly 30% of the parts in a car are plastic, according to industry estimates. The petrochemicals derived from oil and gas end up in dashboards, bumpers, interior trim — and in the solvents and resins that become automotive paint. When the feedstock gets expensive, every molded and coated component carries a surcharge.

Aluminum’s Long Supply Line

Then there is aluminum — the lightweight metal automakers increasingly depend on to improve fuel efficiency and offset heavy EV batteries. Bahrain and the United Arab Emirates account for 9% of global aluminum smelting, according to AlixPartners. The US imports 80% to 90% of its aluminum, and roughly 20% of that comes from the Gulf.

Aluminum smelting is among the most energy-intensive industrial processes anywhere. Higher oil and gas prices raise the cost of running smelters globally, not just in the Middle East. The World Bank projects base metals — including aluminum — will reach all-time highs in 2026, driven not only by the war but by strong demand from data centers, electric vehicles, and renewable energy.

Who Pays — and When

So far, the answer appears to be: not the consumer. Not yet.

GM reported an average transaction price of $52,000 in the first quarter, flat with last year. The industry average was $49,275 in March, according to Cox Automotive. These are affluent buyers, and automakers say they have not seen meaningful shifts away from high-margin trucks and SUVs.

“The No. 1 thing that we’re watching is what happens with the Iranian conflict,” GM CEO Mary Barra told investors. But to date, GM’s vehicle mix has held. Ford CFO Sherry House noted that fuel-price impacts are “a little bit more localized” so far — concentrated in Southeast Asia and Australia — and not yet material to the broader business.

The industry has hedges: vehicles are more fuel-efficient than during the last oil price shock, hybrid options are more widely available, and the buyer base skews wealthy. Ford CEO Jim Farley pointed to “muscle memory” in managing supply chain crises.

But duration is the variable that could change everything. Ford’s annual guidance explicitly excludes a prolonged Middle East conflict. Barra called the war’s duration “uncertain” and said GM is waiting before adjusting its outlook further. The World Bank’s baseline assumes the most acute disruptions end in May, with shipping through Hormuz gradually returning to normal by late 2026. A longer conflict would blow past every estimate on the table.

“The war is hitting the global economy in cumulative waves: first through higher energy prices, then higher food prices, and finally, higher inflation, which will push up interest rates and make debt even more expensive,” said Indermit Gill, the World Bank’s chief economist.

Detroit is riding the first wave. The rest are still building offshore.

Sources