As you would probably be aware of by now, the US-Iran war has resulted in a dramatic spike in oil prices. Thanks to the closure of the Strait of Hormuz, a vital shipping artery for the world's energy supplies, oil prices have shot higher over March. This has had some serious effects for ASX shares.
Before the United States attacked Iran at the end of last month, crude oil was going for around US$72 a barrel. Today, that same barrel is just over US$100. That's after getting pretty close to US$120 last week.
This spike, as well as supply fears in Australia, has resulted in a major dent in investor confidence. Over March thus far, the S&P/ASX 200 Index (ASX: XJO) has dropped by a nasty 6.5% or so. Last week, we discussed how US$100 oil affects almost every corner of the share market. And not in a good way, with the obvious exception of ASX energy stocks.
But today, let's discuss two ASX blue chip stocks that I think are at the front of the firing line in terms of potential commercial damage if oil prices stay elevated going forward.
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Two ASX blue chip stocks that will be hit hard by rising oil prices
First up we have Woolworths Group Ltd (ASX: WOW). Although it might not seem like it at first glance, this ASX 200 stock and supermarket operator is going to suffer if oil prices remain elevated. Woolworths runs an extensive nation-wide supply chain network. Goods have to be moved from suppliers to distribution centres, and then on to the supermarkets themselves. Woolies also runs a burgeoning home delivery service.
Unfortunately for Woolworths, this vast logistics network that moves huge volumes of groceries around our vast country is heavily reliant on diesel-powered trucking. As such, its fuel bill has probably already ballooned and could continue to do so as long as oil prices remain elevated.
Next up, let's talk about Transurban Group (ASX: TCL). Transurban stock has long been a favourite of ASX income investors, who buy this company's shares for the stable and reliable income stream they provide. Transurban enjoys a few advantages that help the company maintain these dividends. For one, Transurban's tolled roads are some of our nation's most popular road routes, with many vital economic arteries spanning major cities like Sydney and Melbourne. For another, this ASX stock is given the right to increase the tolls on these roads regularly, usually by at least the rate of inflation.
However, Transurban is also vulnerable to higher oil prices. Many road users can change to using alternative forms of transport, or increase their working-from-home hours, if the cost of driving spikes. Although driving is not optional for many motorists, others might opt for a train, bus, ferry or bicycle if fuel costs remain elevated. If we see US$100 oil over much of the rest of 2026, I wouldn't be surprised if Transurban's normally stable traffic volumes take a hit.
