Global business rocked by fallout from US-Israel war on Iran
The US-Israeli war on Iran is sending destabilizing ripples through the global economy the conflict is fundamentally disrupting the arteries of international trade, a report shows.
The Saturday report by Reuters news agency said Iranian retaliatory attacks on US assets in the Persian Gulf has effectively paralyzed the Strait of Hormuz, through which 20% of the world's oil passes.
It said global benchmark Brent crude has surged past $90 per barrel, while US gasoline prices jumped 34 cents in a week to average $3.32 per gallon nationally. European natural gas spot prices have spiked 80%, reviving inflationary fears.
For multinational corporations, the timing is particularly painful. Many were already recalibrating supply chains strained by recent trade disputes and tariff wars.
Now, they face soaring logistics costs, unavailable shipping lanes, and uncertainty about basic raw materials, the report said.
It said industrial sectors are buckling under the pressure. Aluminum prices on the London Metal Exchange have soared, with physical premiums in Europe and the US hitting multi-year highs after Gulf producers like Qatalum suspended operations and Aluminum Bahrain declared force majeure.
The region accounts for 8% of global aluminum supply.
The technology sector is confronting unique vulnerabilities. Key inputs for semiconductor manufacturing, such as helium, for which no practical substitute exists, are primarily sourced from the Middle East.
Any prolonged interruption could stall global chip production. Additionally, drone attacks that damaged regional data infrastructure have raised concerns about the security of cloud expansion and digital supply chains, Reuters said.
The report showed that European energy-intensive industries are cutting production as costs spiral. Airlines are also taking hits: budget carrier Wizz Air warned the war could slash its 2026 net profit by €50 million ($58 million).
Consumer goods manufacturers, despite some hedging against energy volatility, warn that sustained conflict will inevitably erode margins and reach household budgets, it said.
Morgan Stanley analysts warn that a prolonged conflict would force companies to activate their "recession playbooks," while Goldman Sachs estimates that $100 oil could shave 0.4% off global growth.
German economic forecasts suggest $100 crude might cost Europe's largest economy €40 billion ($46 billion) in lost output over two years, the report said.
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