US-Iran war has cost global firms around $25B
What's the story
The ongoing US-Israeli conflict with Iran has already cost global companies at least $25 billion, a Reuters analysis has found. The financial toll stems from rising energy prices, disrupted supply chains, and trade routes cut off by Iran's control of the Strait of Hormuz. At least 279 firms have cited the conflict as a reason for measures such as price hikes and production cuts.
Corporate responses
Companies forced to take drastic measures
In response to the financial impact of the conflict, many companies have taken defensive measures. These include suspending dividends or buybacks, furloughing staff, adding fuel surcharges, and seeking emergency government assistance. Whirlpool CEO Marc Bitzer compared this level of industry decline to that seen during the 2008 global financial crisis and even worse than other recessionary periods.
Economic impact
One-fifth of companies flag financial losses
Iran's blockade of the Strait of Hormuz, a key energy chokepoint, has pushed oil prices above $100 a barrel. This has driven up shipping costs, disrupted raw material supplies, and cut off trade routes critical for goods flow. Fertilizers, helium, aluminum, and polyethylene supplies have all been impacted. One-fifth of companies in the review have flagged financial losses due to the war's impact on their operations.
Sector impact
Airlines hardest hit by rising costs
Airlines have borne the brunt of war-related costs, accounting for nearly $15 billion. Jet fuel prices have nearly doubled due to the conflict. As the situation continues, more companies across various sectors are raising alarms about its financial impact on their operations. Japan's Toyota has warned of a $4.3 billion hit, while Procter & Gamble estimates a post-tax profit blow of $1 billion.
Consumer behavior
Elevated gas prices core issue for McDonald's
The surge in fuel prices is impacting lower-income consumer demand, McDonald's CEO Chris Kempczinski said. He added that "elevated gas prices are the core issue we're seeing right now." Nearly 40 firms in industrials, chemicals, and materials industries have announced price hikes due to their exposure to Middle Eastern petrochemical supply. Newell Brands CFO Mark Erceg said every $5 rise in per-barrel oil prices adds around $5 million in costs for their company.