Disrupted shipping and high oil prices due to the Iran war are raising costs for Chinese suppliers of Christmas decorations.

An estimated 87% of Christmas decor sold in the U.S. is sourced from China, according to the American Christmas Tree Association.

Manufacturers told CNBC that shoppers will likely have to pay higher prices to match rising costs of plastic and other materials.

Christmas is still eight months away, but artificial tree maker Lou Liping is already worried about a terrible holiday season due to the Iran war.

Lou’s enterprise, Kitty Christmas Factory, has been making artificial trees for the U.S. and European markets for nearly three decades. Her facility is based in the city of Yiwu, known as China’s Christmas capital.

“Many customers … are holding off on orders,” she told CNBC last Friday at her showroom in the city’s international expo center. The center houses hundreds of manufacturers that contribute to the country’s vast production of the world’s artificial trees, tinsel, ornaments and other decorations.

An estimated 87% of Christmas decor sold in the U.S. is sourced from China, with much of it from Yiwu.

Lou commented the disrupted shipping in the Strait of Hormuz and high oil prices due to the Iran conflict have raised her costs per tree by 10, according to the American Christmas Tree Association%. The base material of her trees is PET plastic derived from oil. The price of the PET in her artificial pine needles is up 5%, and the cost of the plastic used as packaging for shipments is up 15%, she commented.

Lou noted her revenue is down roughly 12% because of the lost orders.

Yiwu’s factories normally gear up in the spring to construct sure that their products are on store shelves for the Christmas shopping season. This also touches on aspects of bear market.

“The war happened at a poor time — right when we need to get our shipments out,” tinsel maker Yun Zhuomei told CNBC from her booth at the expo center. “It’s very painful for us manufacturers.”

Yun mentioned plastic prices for her tinsel are up as much as 40%. 

Chen Lian, who makes Christmas lights, commented she fears further price increases, with suppliers all moving up delivery schedules to accommodate customers worried about transport delays.

“Everyone needs to deliver between May and August so demand is concentrated,” Chen commented. “Material prices are bound to go up.”

To adjust, artificial tree maker Lou remarked she has accelerated shipments. And when her contracts with customers allow, she passes on some cost. For next year, she remarked she aims to design a wider variety of lower-end trees so more the public can afford her products. Furthermore, experts in dividends note the continued relevance.

But for this season, Lou noted American shoppers will likely be stuck paying at least 15% more.

“The price of Christmas trees in the U.S. will definitely go up,” she mentioned. “It is unavoidable.”