Amazon imposes ‘fuel surcharge’ on sellers as global energy market turmoil due to Iran war

The Iran war has devastated the world oil market, and U.S. gasoline prices have skyrocketed. In response to rising shipping costs, Amazon has introduced a new 3.5% fuel surcharge for sellers using its distribution network. The policy could impose significant new costs on countless merchants who rely on e-commerce giants to sell their products.

Amazon told TechCrunch that the levies will remain in place for the foreseeable future, but the company will continue to evaluate potential policy changes as market conditions change. The news was originally reported by Bloomberg.

A spokesperson said, “The operating costs of the industry as a whole are rising due to rising fuel and logistics costs.” “We have absorbed these increases to date, but like other major airlines, we introduce temporary surcharges to recover some of our costs when costs are still rising.” The spokesperson added that the surcharges were “significantly lower than the surcharges applied by other major airlines.”

The new policy will go into effect on April 17th and will affect sellers using the company’s Fulfillment by Amazon service, Bloomberg writes. Fulfillment by Amazon, commonly known as FBA, allows businesses to send their products to Amazon’s warehouses, where they are packed and shipped to customers. Amazon doesn’t say how many sellers use FBA, but the program powers the majority of third-party sales on its platform.

Amazon first introduced this kind of surcharge in 2022. Not coincidentally, this was the last time oil traded above $100 per barrel. What would have happened in 2022? Russia had just invaded Ukraine and wreaked havoc on the energy market. Today, the Iran war, precipitated by the assassination of the nation’s supreme leader by the Trump administration and the Israeli government, is shaking up markets as well.

Iran is strategically located along its northern border in the Strait of Hormuz, a narrow but critical waterway for global oil supplies through which about 20% of the world’s oil supplies pass, and the country is attempting to block the Strait of Hormuz, a move that has had a major impact on energy prices around the world.