Iran War’s $25 Billion Cost: What Global Firms Must Know to Protect Their Investments
The ongoing U.S.-Israeli conflict with Iran has already inflicted a financial toll of at least $25 billion on companies worldwide, with costs continuing to rise, according to a Reuters analysis. An examination of corporate statements from firms listed in the United States, Europe, and Asia reveals the extensive business fallout. Companies are struggling with soaring energy prices, disrupted supply chains, and trade route blockades caused by Iran’s control of the Strait of Hormuz.
At least 279 companies have identified the war as a catalyst for defensive measures aimed at mitigating financial damage. These actions include raising prices, reducing production, suspending dividends or share buybacks, furloughing employees, imposing fuel surcharges, and seeking emergency government aid.
This disruption, the latest in a succession of global shocks following the COVID-19 pandemic and Russia’s invasion of Ukraine, is dampening corporate outlooks for the remainder of the year. There is little expectation of a swift resolution to the conflict. Whirlpool CEO Marc Bitzer, after halving the company’s full-year forecast and suspending its dividend, noted, “This level of industry decline is similar to what we observed during the global financial crisis and even higher than during other recessionary periods.” Analysts warn that as economic growth slows, companies’ pricing power will weaken, fixed costs will become harder to manage, and profit margins will be pressured in the second quarter and beyond. Continued price increases are likely to drive inflation higher, further eroding already fragile consumer confidence. Bitzer added that “consumers are holding back on replacing products and are rather repairing them.”
Rising costs affect numerous industries. Alongside Whirlpool, companies such as Procter & Gamble, Malaysian Karex, and Toyota have highlighted the escalating financial impact as the conflict extends into its third month.
Iran’s blockade of the Strait of Hormuz—a critical global energy chokepoint—has pushed oil prices above $100 a barrel, over 50% higher than pre-conflict levels. This closure has escalated shipping costs, constrained raw material supplies, and severed vital trade routes. Key inputs impacted include fertilizers, helium, aluminum, and polyethylene.
Approximately 20% of the companies analyzed, spanning sectors such as cosmetics, tires, detergents, cruise lines, and airlines, have reported financial setbacks linked to the war. The majority are based in the UK and Europe, regions where energy prices were already elevated, while nearly a third hail from Asia, reflecting their reliance on Middle Eastern oil and fuel.
By comparison, hundreds of companies had reported over $35 billion in costs stemming from U.S. tariffs imposed in 2025 under former President Donald Trump. Airlines face the largest chunk of war-related losses, totaling nearly $15 billion due to jet fuel prices nearly doubling. As the crisis worsens, companies in other sectors are voicing growing concerns. Japan’s Toyota projects a $4.3 billion loss, while Procter & Gamble estimates a $1 billion post-tax profit hit. Fast-food chain McDonald’s has also warned of prolonged cost inflation driven by supply chain disruptions, a concern historically limited to industrial sectors. CEO Chris Kempczinski noted, “Elevated gas prices are the core issue we’re seeing right now,” highlighting the dampening effect on lower-income consumer demand.
Nearly 40 companies in the industrial, chemical, and materials sectors have declared intentions to raise prices due to their exposure to Middle Eastern petrochemical supplies. Newell Brands CFO Mark Erceg commented that every $5 increase in oil prices adds approximately $5 million in costs. German tire manufacturer Continental anticipates at least a 100 million euro ($117 million) loss in the second quarter, attributing it to soaring oil prices driving up raw material costs. Executive Roland Welzbacher said the financial impact would likely be reflected in full during the second half of the year.
Despite these challenges, corporate profits have remained resilient through the first quarter, helping key indices such as the S&P 500 reach new highs even as energy costs climb and inflation concerns grow. However, analysts report that second-quarter net profit margin forecasts have been lowered by 0.38 percentage points for S&P 500 industrial firms, 0.14 points for consumer discretionary companies, and 0.08 points for consumer staples, according to FactSet data. Goldman Sachs analysts warn that European STOXX 600 companies will start experiencing margin pressures in the second quarter as it becomes more difficult to pass on rising costs and hedging protections expire.
Consumer-facing sectors including automotive, telecommunications, and household products are facing negative earnings revisions exceeding 5% for the next year, according to Gerry Fowler, UBS head of European equity strategy. In Japan, second-quarter earnings growth estimates have been halved to 11.8% since the end of March.
Rami Sarafa, CEO of Cordoba Advisory Partners, observed, “The true earnings hit has not yet materialized in most companies’ results,” underscoring the ongoing financial strain yet to fully reflect in corporate earnings reports.
Special Analysis by Omanet | Navigate Oman’s Market
The ongoing U.S.-Israeli war with Iran is exerting significant pressure on global supply chains and energy prices, with widespread financial impacts across industries. For businesses in Oman, this underscores the critical importance of energy security and supply chain resilience given the country’s strategic proximity to the Strait of Hormuz. Smart investors and entrepreneurs should prioritize investment in alternative energy sources and logistics innovations to mitigate risks and capitalize on the shifting market dynamics driven by geopolitical instability.
