Neal Freiman

It's a reminder that as the war with Iran drives up oil prices, it's not just the gas you put in your tank that gets pricier, but everything that uses plastic, too.

Plastic is a hidden inflation driver.

Between 4% and 8% of total global oil production is used to make the stuff that encapsulates our stuff.

The Oddbots team at Bloomberg highlighted the example of a bag of carrots.

To bring a bag to grocery shelves, there's farming, transport, and store costs.

All of those require energy of some sort, but the overlooked part of the equation is a little plastic baggie your carrots come in.

If polyethylene prices go up,

That bag becomes more expensive.

And since your carrots only cost around $2 to begin with, any incremental height in input costs is going to cause price hikes.

Neil Tracy Allaway from Bloomberg put it well, there's something kind of remarkable or perhaps dystopian that in today's economy, even when you're buying carrots, you're really buying crude oil.

And it's been good for Dow's business.

Again, they had this price hike already planned.

Prices of these feedstocks inputs were already going up before the war.

Now that the war has exacerbated that, Dow shares rose more than 6% on Tuesday after they announced that they're up 25% since the start of the war.

An interesting thing, too, is that how much does this actually going to affect CPI readings and inflation readings?

As we look ahead to the next inflation number that shows up, it's going to show up in the food prices.

Energy as a whole, when it comes to the index, is not a massive weighting.

It's just 6.3% of the index.

But food prices accounts for...

15% of the index.