\n<\/p>\n
The US.-Israeli war with Iran is rattling businesses worldwide, driving up energy prices, squeezing supplies of critical raw materials and raising questions about the reliability of trade routes critical to the flow \u200bof goods from food to car parts.<\/strong><\/p>\n The widening conflict has choked major air and sea transport corridors through the Middle East. Shipping through the Strait of Hormuz, a conduit for one-fifth of \u200cthe world\u2019s oil, slowed to a near-halt as in the ongoing war Iran retaliated with drone strikes against US. and Israeli attacks. Busy air transit routes in the Gulf have gone dark.<\/p>\n Soaring oil and gas prices have pushed up costs for companies, threatening their margins, and raised the spectre for policymakers and investors of a fresh bout of inflation.<\/p>\n \u201cIf these effects last longer, everyone will start to feel them,\u201d Young Liu, chairman of Foxconn , the world\u2019s largest electronics maker and a key partner to Nvidia , said on Friday.<\/p>\n A KNOCK-ON EFFECT ON EVERY COMPANY<\/strong><\/p>\n Even before last \u200bSaturday\u2019s strikes, companies were struggling with US. President Donald Trump\u2019s trade war, after hefty US. import tariffs drove up costs, upended supply chains and hurt consumer confidence.<\/p>\n A spike in gas pump prices is another \u200bblow to US. consumers: a gallon of regular gasoline cost an average $3.32, nationwide on Friday, up from $2.98 a week ago. Brent crude futures have spiked to $90 per barrel but \u2060remain below levels of 2022 when Russia invaded Ukraine.<\/p>\n \u201cAny time you see an increase in oil price or gas price, it\u2019s got a knock-on effect further down on every company, on every industry,\u201d Simon Hunt, CEO of \u200bItalian drinks maker Campari, told Reuters after the firm\u2019s results this week.<\/p>\n PAIN IN EUROPE STILL RECOVERING FROM 2022 CRISIS<\/strong><\/p>\n In Europe, still recovering from 2022\u2019s energy crisis, the pain is acute for energy-intensive industries like chemicals.<\/p>\n The IW German Economic \u200bInstitute said on Thursday that oil at $100 per barrel could cost Germany\u2019s economy 0.3% of GDP this year and 0.6% next year \u2013 a loss of economic output amounting to around 40 billion euros ($46 billion) over two years.<\/p>\n Campari\u2019s Hunt said the firm has some long-term contracts in place to protect against big energy price increases. Reckitt Benckiser CFO Shannon Eisenhardt told analysts the consumer goods firm has hedged about 55% of its oil and gas price exposure for 2026.<\/p>\n But Uniden, which represents energy-intensive French industries including chemicals, autos and agriculture, \u200bwarned some companies were already cutting back.<\/p>\n \u201cThe impact on gas prices in Europe has been immediate, with an 80% increase in the spot price and considerable uncertainty about its future,\u201d it said in a statement. \u201cSome production has \u200btherefore been halted or slowed down.\u201d<\/p>\n Airline stocks have also been hammered. European budget carrier Wizz Air, which is hedged, warned that the war would dent its net profit for fiscal year 2026 by about 50 million euros ($58 million).<\/p>\n ALUMINIUM, HELIUM AND SULPHUR<\/strong><\/p>\n The disruption to sea \u200cfreight affected \u2060specialised industrial inputs like sulphur and led major aluminium producers to invoke force majeure clauses. Shippers and insurers have hiked some prices dramatically in response to the conflict.<\/p>\n Qatari smelter Qatalum began shutting down operations this week, while Aluminium Bahrain said it had halted shipments and declared force majeure because it could not move metal through the Strait of Hormuz. The Gulf region accounts for about 8% of global aluminium supply.<\/p>\n Aluminium prices on the London Metal Exchange jumped sharply on the news, while physical premiums in Europe and the United States climbed to multi\u2011year highs.<\/p>\n South Korean officials warned that a prolonged conflict could disrupt supplies of key semiconductor manufacturing materials sourced from the Middle East, including helium, which is essential for \u200bchip production and has no viable substitute.<\/p>\n Drone strikes that damaged \u200bsome of Amazon\u2019s data centres in the United \u2060Arab Emirates and Bahrain raised questions about technology supply chains and Big Tech\u2019s pace of expansion in the region.<\/p>\n RECESSION PLAYBOOK<\/strong><\/p>\n A prolonged energy shock could call for the \u201crecession playbook\u201d, Morgan Stanley warned, while Goldman Sachs analysts said a temporary surge in oil prices to $100 per barrel could slow global growth by 0.4 of a percentage point.<\/p>\n Much depends on the length \u200bof the conflict, highly uncertain even if many feel that Trump doesn\u2019t want a protracted and costly war ahead of November\u2019s U.S. midterm elections.<\/p>\n \u201cYou don\u2019t really \u200bwant this to last for too \u2060long,\u201d said Emmanuel Cau, Head of European Equity Strategy at Barclays. \u201cIf it is a few weeks or months, of course you\u2019re going to have earnings expectations starting to be cut.\u201d<\/p>\n British auto distributor Inchcape said the conflict could delay some Japan-Europe shipments by weeks, while online travel agent Loveholidays is preparing to delay its London IPO because of market turmoil and travel chaos.<\/p>\n Markus Krebber, CEO of RWE, Germany\u2019s biggest power producer, said that energy was \u201conce again dominating headlines all over the world\u201d.<\/p>\n \u201cGas and oil \u2060prices are volatile, \u200bkey shipping routes face geopolitical pressure, and policymakers are concerned about supply risks,\u201d Krebber said.<\/p>\n \u201cThe renewed uncertainty is a reminder of an \u200buncomfortable reality: the next energy crisis isn\u2019t an if \u2013 it\u2019s a when, and a question of how prepared we are.\u201d<\/p>\n<\/div>\n