Amazon To Charge Sellers Extra In Light Of Rising Oil Prices

Online retailer Amazon.com Inc (AMZN) said on Thursday that it will start charging sellers a surcharge to compensate for rising oil prices.

The company said in a statement that it will impose a 3.5% “fuel and logistics” surcharge later this month on sellers who use its shipping services in the U.S. and Canada.

“Elevated costs in fuel and logistics have increased the cost of operating across the industry,” the company said, while adding that it absorbed the increased costs so far.

The company said that it will apply the surcharge across Fulfillment by Amazon (FBA) selling program in the US and Canada as well as to Remote Fulfillment with FBA from the US into Canada, Mexico, and Brazil starting April 17. Fulfillment by Amazon (FBA) is a service where sellers send products to Amazon fulfillment centers, and Amazon handles storage, packing, shipping, and customer service. Starting May 2, the surcharge will also apply to items shipped by Amazon for merchants who sell on their own websites or through other retailers.

Amazon also noted that surcharge is “meaningfully lower” than other major carriers due to its efforts to lower costs. It added that it will continue to evaluate the surcharge as conditions evolve.

Oil Prices

As the U.S.-Israeli war against Iran enters its sixth week, oil prices have surged into uncharted territory, with Brent crude leaping more than 50 percent since strikes began on Feb. 28 and briefly piercing $119 a barrel before settling near $108–$112 amid fresh volatility. Iran has imposed a de-facto blockade on the Strait of Hormuz — the chokepoint for nearly one-fifth of global oil — while repeated Iranian missile and drone strikes on refineries and gas plants in the UAE, Bahrain and Qatar have further crippled energy supplies.

How Did Retail Traders React?

On Stocktwits, retail sentiment around AMZN stayed within the ‘neutral’ territory over the past 24 hours, while message volume remained at ‘high’ levels.

AMZN stock has gained 7% over the past 12 months. 

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