The escalating tensions in the Middle East are once again putting a global chokepoint in the spotlight. The Strait of Hormuz is one of the world's busiest energy corridors, and any closure sends shockwaves far beyond the region. Joining me now is Ben Johnston, COO of Kapitus, a small business lender and marketplace. Ben, welcome to the show.
Thank you very much for having me.
When something like the conflict in the Middle East is ongoing, how fast does that actually trickle down to small businesses?
When it pertains to the cost of oil and gas, it happens really quickly. And keep in mind, small businesses are dealing with a lot of issues these days — not just oil and gas prices, but elevated inflation, a very volatile tariff strategy with a $28 billion trade war kicked off with Canada, a slowing job creation, and a shrinking labour supply. And now the spike in oil and gas prices due to the war in Iran, which has real implications for the cost of raw materials for US manufacturers.
Everyone thinks about oil — but what else gets affected that surprises small business owners?
Oil and gas prices are the obvious ones — up about 30% on average since the start of the conflict. But if you are in agriculture, fertiliser prices are up somewhere between 30 and 50%. If you are a manufacturer, industrial metals — aluminium, copper, phosphates — are up significantly because so many are sourced through the Middle East. Plastics and chemicals sourced from the Middle East. And helium futures are up 15 to 30% on long-term contracts. Saudi Arabia and the UAE are also global logistics hubs, so lots of materials would finish processing there and ship out — and that shipping is now drastically constrained.
How long can a small trucking business go before a price spike starts to hurt them?
It hits them immediately. Even when conflict subsides and then comes roaring back over a weekend, you see diesel prices spike. Trucking is able to reprice its loads fairly quickly, especially those not on long-term contracts. So truckers can pass costs onto customers. But for anything midstream or already contracted for delivery, their margins are going to shrink drastically given that the bulk of their cost of goods is diesel.
Are you seeing more small businesses coming to Kapitus for help covering these costs?
It is hard to isolate all the reasons someone might seek capital. But when there is a short-term cost spike, small businesses do search for working capital to keep running smoothly. The silver lining is that the economy continues to grow and consumer spending remains strong. Importers who paid $166 billion worth of tariffs in 2025 and early 2026 are now receiving refunds. Small businesses are resilient — they reprice quickly, bring those prices to market, and keep looking for growth opportunities.
If this tension continues for the next couple of months, what does it mean for farmers heading into planting season?
Farmers have it almost more difficult than anyone else because they have to look out and figure out what demand is going to be for the products they are providing — months in advance. They are looking closely at which crops will have the most affordable fertilisers and require the fewest passes over the field. And they are doing a lot of forward math. Truckers have a shorter-term viewpoint and can reprice more quickly. Contractors and manufacturers have longer-term jobs to plan around — but now that prices are what they are, they are working them into all their bids and making sure they have appropriate margins. If oil and gas prices fall over the next six months, hopefully that means wider margins than they budgeted for.
Awesome. Ben, thank you for your time and input on what is going on and how it is impacting Middle America.
Thank you for having me.
