Oil is used in every area of the footwear supply chain, and price increases impact more than just transportation costs.

According to a recently released study from the Footwear Distributors and Retailers Association (FDRA), the trade organization detailed the different areas of the shoe supply chain, and how the cost impacts in total might affect FOB, or freight on board, when the liability, ownership and cost of goods transfers from the seller to the buyer. It also cited to the Footwear Innovation Foundation’s Carbon Report, which noted that 47 percent of shoes produced globally are classified as “rubber [or] plastic.” Even shoes classified as textile or leather have exposure to oil prices.

Should oil hold above $90 a barrel for consecutive months, cost pressures will accelerate across the footwear supply chain with a reduced ability to absorb the increases. The FOB increase could range from 1.5 percent to 3 percent per pair by mid-summer for some shoes, with most increases starting in late summer imports for the Fall/Winter retail selling period. That FOB increase includes a 1 percent to 2.5 percent uptick in material cost increases for Tiers 4, 3 and 2 within four to 12 weeks plus a factory production increase to shoe companies ranging from 1 percent to 1.5 percent.

Tier 4 is the harvesting phase, such as crude oil extraction and refining and petrochemical processing. Tier 3 represents processing of materials, such as at tanneries and mills. Tier 2 are the suppliers that manufacture specific components that include synthetic textiles, plastics, rubber chemicals, EVA and PU foam). Tier 1 represents the factory level covering assembly and packaging. FDRA noted that while apparel is made predominantly from textiles, shoes contain a more diverse group of materials and components that have more exposure to oil price volatility.

Shoe prices were already on the rise in February after a sharp increase at the start of 2026, according to FDRA data. The data for March is set for release this Friday.

Oil is a direct feedstock for 30 percent of basic synthetic shoe’s materials and components. Another 40 percent of that same shoe’s materials has some exposure to oil rate swings. When combined, materials for basic shoes could have a 70 percent exposure to oil price swings for Tiers 4, 3, and 2.

Short term cost impacts such as spot markets for shipping and transportation could face a 7 percent to 9 percent uptick for every 10 percent oil price increase. Longer term shipping contracts could see a 5 percent to 7 percent increase for every 10 percent gain in oil prices. And even during a down cycle when prices slow or begin to decline, there still could be a 3 percent to 6 percent increase for every 10 percent oil price increase due to the lag time — could be a two-week delay to a broader pass-through in four weeks’ time or longer — for when costs get pushed through.

As for the shoe components, material suppliers could pass through “meaningful cost increases” within one to two months where they can do so based Tier 3 prices and Tier 1 demand. The study said that 60 percent to 75 percent of inputs for material development are petrochemical-based, and 25 percent to 40 percent of those input costs are “directly tied to crude oil.”

The resulting cost impact to Tier 1 will vary, and can be expected to be higher for foam-heavy and synthetic-heavy products and lower for constructions using natural or mixed materials. And depending on inventory needs, the timeline for the cost push to consumers can range initially to two weeks and possibly eight weeks for a broader pass-through to Tier 1.

Shoe factories experience price pressures from oil rate increases through higher costs for material inputs, with additional pressure coming from energy and operations. The push through can range from one month to three months, depending on product type, demand and contracts. In addition, the electric bill to run the factory can run high as the energy source for many parts of Asia is still oil and natural gas.

Another consideration is that high gas prices could result in other costs to factories, such as possibly workers demanding wage increases as their transit costs rise. And if gas is rationed or public transit becomes limited — both are probabilities across Asian countries where the shoe factories are located — there could be impacts to the production line if workers are unable to get to the factory.