Hormuz Crisis Saddles Global Companies with $25 Billion Bill

Oil/Chemical Tanker "Bald Man" at the Port of Fujairah, as the US-Israel conflict with Iran limits marine traffic in the Strait of Hormuz, in Fujairah, United Arab Emirates, May 6, 2026. (Reuters)
Oil/Chemical Tanker "Bald Man" at the Port of Fujairah, as the US-Israel conflict with Iran limits marine traffic in the Strait of Hormuz, in Fujairah, United Arab Emirates, May 6, 2026. (Reuters)
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Hormuz Crisis Saddles Global Companies with $25 Billion Bill

Oil/Chemical Tanker "Bald Man" at the Port of Fujairah, as the US-Israel conflict with Iran limits marine traffic in the Strait of Hormuz, in Fujairah, United Arab Emirates, May 6, 2026. (Reuters)
Oil/Chemical Tanker "Bald Man" at the Port of Fujairah, as the US-Israel conflict with Iran limits marine traffic in the Strait of Hormuz, in Fujairah, United Arab Emirates, May 6, 2026. (Reuters)

The US-Israeli war with Iran has already cost companies around the world at least $25 billion - and the bill is climbing, according to a Reuters analysis.

A review of corporate statements since the start of the conflict by companies listed in the United States, Europe and Asia offers a sobering look at the fallout.

Businesses are grappling with soaring energy prices, fractured supply ‌chains and trade routes severed by Iran's chokehold on the Strait of Hormuz.

At least 279 companies have cited the war as a trigger for defensive actions to blunt the financial hit, including price increases and production cuts, the analysis shows.

Others have suspended dividends or buybacks, furloughed staff, added fuel surcharges, or sought emergency government assistance.

“This level of industry decline is similar to what we have observed during the global financial crisis in 2008, and even higher than during other recessionary periods,” Whirlpool CEO Marc Bitzer told analysts after it slashed its full-year forecast in half and suspended its dividend.

As growth slows, pricing power will weaken and fixed costs will become harder to absorb, analysts say, threatening profit margins ⁠in the second quarter and beyond. Sustained price hikes are likely to fuel inflation, hurting already-fragile consumer confidence.

“Consumers are holding back on replacing products and rather repairing them,” Bitzer said.

The appliance maker is not alone. Companies including Procter & Gamble, Malaysia’s Karex company and Toyota have warned of the mounting toll as the conflict enters its third month.

Iran's blockade of the Strait of Hormuz - the world's most critical energy chokepoint - has pushed oil prices above $100 a barrel, more than 50% higher than before the war.

The closure has driven up shipping costs, squeezed supplies of raw materials and cut off trade routes vital to the flow of goods. Supplies of fertilizers, helium, aluminum, polyethylene and other key inputs have been hit.

One-fifth of companies in the review, which make everything from cosmetics to tires and detergent, to cruise operators and airlines, have flagged a financial hit due to the war.

A majority were based in the UK and Europe, where energy costs were already elevated, while almost a third were from Asia, reflecting those regions' deep reliance on Middle Eastern oil and fuel products.

To put the tally into context, hundreds of companies by October last year had flagged more than $35 billion in costs from US President Donald Trump’s 2025 tariffs.

Airlines account for the biggest share of quantified war-related costs, representing nearly $15 billion, with jet fuel prices having nearly doubled.

Sounding the alarm

As the bottleneck drags on, more companies from other industries are sounding the alarm. Japan's Toyota warned of a $4.3 billion hit while P&G estimated a $1 billion ‌post-tax profit ⁠blow.

Fast-food giant McDonald's said earlier this month it expected higher long-term cost inflation from ongoing supply-chain disruptions, the kind of assessment that until recently had been confined to industrial earnings calls.

The surge in fuel prices is hurting lower-income consumer demand, CEO Chris Kempczinski said, adding that “elevated gas prices are the core issue we're seeing right now.”

Nearly 40 companies in the industrials, chemicals, and materials industries have said they would raise prices due to their exposure to Middle Eastern petrochemical supply.

Newell Brands Chief Financial Officer Mark Erceg said earlier this month that every $5 rise in per-barrel oil prices adds about $5 million in costs.

German tiremaker Continental expects a hit of at least 100 million euros ($117 million) from the second quarter due to surging oil prices making raw materials more expensive.

Continental executive Roland Welzbacher said earlier this month that it would take three to ⁠four months before affecting the company's profit-and-loss statement. “It probably hits us late in Q2, and then it will come in full-blown in the second half,” he said.

Corporate profits have been buoyant through the first quarter, part of why major indexes like the S&P 500 have managed to scale new highs even as energy costs bite and bond yields rise on inflation-led worries.

Since March 31, second-quarter net profit margin forecasts have been cut by 0.38 percentage points for S&P 500 industrials, 0.14 percentage points for consumer discretionary companies and 0.08 ⁠percentage points for consumer staples, FactSet data show.

European STOXX 600-listed companies will face margin pressure beginning in the second quarter, as it will become harder to pass through extra costs and as protection from hedging expires, Goldman Sachs analysts said.

Consumer-facing sectors including autos, telecoms, and household products are seeing negative revisions of more than 5% for the next 12 months, Gerry Fowler, UBS head of European equity strategy, said.

In Japan, analysts have halved estimates for second-quarter earnings growth to 11.8% since the end of March.

“The ⁠true earnings hit has not yet materialized in most companies' results,” said Rami Sarafa, CEO of Cordoba Advisory Partners.



Gold Jumps Over 2% on Softer Dollar After Democratic Midterm Wins

UK gold bullion bars are stacked at Baird & Co in Hatton Garden in London, Britain, October 8, 2025. (Reuters)
UK gold bullion bars are stacked at Baird & Co in Hatton Garden in London, Britain, October 8, 2025. (Reuters)
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Gold Jumps Over 2% on Softer Dollar After Democratic Midterm Wins

UK gold bullion bars are stacked at Baird & Co in Hatton Garden in London, Britain, October 8, 2025. (Reuters)
UK gold bullion bars are stacked at Baird & Co in Hatton Garden in London, Britain, October 8, 2025. (Reuters)

Gold prices rose 2% on Wednesday, supported by a weaker US dollar after Democrats secured key victories in midterm elections, while investors looked ahead to non-farm payrolls data later this week for clues on the Federal Reserve's policy path.

Spot gold climbed 2.2% to $4,016.01 per ounce by ‌0619 GMT, while US ‌gold futures for December delivery rose 2.2% ‌to $4,026.90.

"A ⁠weaker USD and ⁠a punchy decline in both nominal and real US Treasury yields are clearly providing support for gold," said Chris Weston, head of research at Pepperstone.

Additionally, "the demand for protection against a potentially more unpredictable and confrontational Trump administration looks to be providing a compelling backdrop for gold buyers," Weston added.

Global stocks slumped, and the ⁠dollar softened on Wednesday as Democrats scored a ‌decisive win in the US ‌midterm elections.

A softer dollar makes greenback-priced bullion more affordable for buyers ‌overseas.

On the geopolitical front, Iran and the United States ‌are still far from a deal to end their war, a senior Iranian official told Reuters on Tuesday, as Trump declined to rule out resuming US combat operations after the elections.

Traders currently see a ‌79% chance that the Fed will raise rates in December, according to CME's FedWatch tool. Higher interest ⁠rates increase ⁠the opportunity cost of holding non-yielding bullion, reducing its appeal to investors.

Markets now await the US non-farm payrolls report due on Friday.

"$4,000 is the obvious resistance level — and a break (on) either side of that range could dictate gold's next decent move," said Matt Simpson, senior market analyst at StoneX.

India's gold demand is expected to fall to a six-year low in 2026, as elevated prices weigh on jewellery sales and investment demand moderates, the World Gold Council (WGC) said on Tuesday.

Among other metals, spot silver gained 3.8% to $51.67, platinum 2.8% to $1,455.71 and palladium climbed 3.8% to $969.49.


Oil Rises on Iran War Uncertainty After Trump’s Republicans Face Election Rout

An oil and gas well stands in a corn field before the November midterm elections in the Tuscarawas County village of Bolivar, Ohio, US, October 25, 2026. (Reuters)
An oil and gas well stands in a corn field before the November midterm elections in the Tuscarawas County village of Bolivar, Ohio, US, October 25, 2026. (Reuters)
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Oil Rises on Iran War Uncertainty After Trump’s Republicans Face Election Rout

An oil and gas well stands in a corn field before the November midterm elections in the Tuscarawas County village of Bolivar, Ohio, US, October 25, 2026. (Reuters)
An oil and gas well stands in a corn field before the November midterm elections in the Tuscarawas County village of Bolivar, Ohio, US, October 25, 2026. (Reuters)

Oil prices rose on Wednesday in a volatile session as investors awaited Washington's next move in the war with Iran, with Democrats capturing control of US Congress from President Donald Trump's Republicans in midterm elections.

Brent futures rose 82 cents, or 0.8%, to $104.42 a barrel at 0510 GMT. US West Texas Intermediate crude futures gained 50 cents, or 0.5%, to $96.59, reversing earlier declines.

In the previous session, Brent settled at its lowest level in nearly four weeks as traders weighed talks to end ‌the wars ‌in Ukraine and Iran.

Vote counting was underway in the US ‌midterm ⁠elections, with Democrats snaring ⁠majorities in both houses of Congress for the rest of Trump's second term.

"President Trump's conflicting signals, with military strikes continuing alongside statements downplaying further escalation, have made it difficult for traders to build strong directional conviction," said Priyanka Sachdeva, head of market insights at Phillip Nova.

"I believe some profit-taking and reduction in speculative long positions are justified, particularly after the sharp rally in October," said Sachdeva.

"However, the underlying supply disruption ⁠risks around the Strait of Hormuz have not disappeared. An ‌unexpected drawdown in US crude inventories is also ‌offering some fundamental support," she added.

The US had carried out "defensive" strikes on Iran's Qeshm island targeting ‌surface-to-air missiles used against US assets, a US official said on Tuesday. ‌Another official said the strikes appeared limited and did not signal a return to major combat operations.

Markets remained on watch for any progress in talks to end the US-Israeli war with Iran, as Qatar stepped up mediation efforts to avert an escalation of attacks after ‌the US elections.

A senior Iranian official told Reuters on Tuesday that Iran and the United States remain far from a ⁠deal to end ⁠their war.

US President Donald Trump told the Financial Times on Tuesday that the United States had no immediate plans to strike Iran.

Meanwhile, crude stocks fell by 5.27 million barrels in the week ended October 30, market sources said on Wednesday, citing data from the American Petroleum Institute.

Eight analysts polled by Reuters had expected, on average, a rise of about 880,000 barrels in crude inventories.

Gasoline stocks rose by 1.43 million barrels, while distillate inventories fell by 1.19 million barrels from a week earlier, the sources said.

"Diesel inventories remain tight, while gasoline stocks rose more than expected. The data are broadly supportive of oil prices," Haitong Futures said in a note on Wednesday.


Aramco Begins East-West Pipeline Expansion to Boost Oil Export Flexibility

Aramco CEO Amin Nasser speaks at a press conference. (Reuters)
Aramco CEO Amin Nasser speaks at a press conference. (Reuters)
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Aramco Begins East-West Pipeline Expansion to Boost Oil Export Flexibility

Aramco CEO Amin Nasser speaks at a press conference. (Reuters)
Aramco CEO Amin Nasser speaks at a press conference. (Reuters)

Saudi Aramco President and CEO Amin H. Nasser said on Tuesday that preliminary engineering had already started on a planned expansion of the kingdom's vital East-West pipeline as part of plans to increase oil flows through existing infrastructure, assess alternative export routes and explore expanding crude storage capacity at major demand centers. 

"Preliminary engineering is underway for an expansion of the East-West pipeline," Nasser said in an earnings call. The CEO said last month that Aramco hoped to increase the capacity of the pipeline network from 7 million to 10 million barrels a day.

Aramco reported a 9% year-on-year increase in adjusted net profit to 117 billion riyals ($31.2 billion) in the third quarter of this year, beating analysts’ expectations of $30.66 billion.

Nasser said the pipeline played a key role in providing additional oil export options during the disruptions, adding that the company was also considering expanding crude oil storage capacity at major demand centers and along export routes.

He said the long-term value of the East-West Pipeline investment had become evident amid the current disruptions to regional trade, noting that the company had recovered the pipeline’s entire construction cost in about 15 days.

Production Capacity

Nasser said Aramco was exploring additional oil export routes and storage capacity outside the Kingdom, while using Gulf export terminals and ship-to-ship transfers to deliver supplies to customers.

He added that the company could raise its maximum sustainable production capacity above 12 million barrels per day if the government decides to do so.

Biggest Supply Shock in the Energy Industry

He described the regional conflict as the biggest supply shock in the energy industry, saying Aramco maintained customer commitments by diversifying export routes, restoring facilities and optimizing operations.

The company’s resilience, he said, stemmed from decades of planning, robust infrastructure, skilled employees, local supply chains and technological innovation, enabling it to continue delivering major projects safely and on schedule despite disruptions.

Zuluf Field Production Expansion

The CEO said work to expand production at the Zuluf field had begun as planned, with additional capacity of up to 600,000 barrels per day expected by the end of the year. He added that Aramco was continuing to advance major crude-to-chemicals projects both inside and outside the Kingdom.

He said the upstream segment delivered stable results, reflecting continued price strength despite a decline from the previous quarter. Meanwhile, adjusted earnings before interest and taxes (EBIT) in the downstream segment rose by more than $4 billion quarter on quarter.

Ability to Restore Production Within Weeks

Nasser said supplies had become indispensable, and demand remained strong, adding that Aramco could rapidly ramp up production. This capability positioned the company to generate significant financial gains.

More Than 90% of Restart Materials Sourced Locally

Aramco faced significant challenges during the disruptions but managed them through flexibility, speed, multiple options and operational excellence, he stated.

He explained that the company’s integrated response center coordinates management teams with specialized, multidisciplinary rapid-assessment teams, enabling a swift response to incidents and disruptions.

Nasser said Aramco’s local supply chains enabled the rapid sourcing and rerouting of critical materials to ensure operational continuity. The company also uses drones for real-time damage assessments, with more than 90% of restart materials sourced domestically. Independent benchmarks show Aramco completes emergency repairs six times faster than the industry average.

Capital Expenditure

Aramco remained disciplined in its capital spending, maintaining its 2026 capital expenditure guidance at $50 billion-$55 billion, Nasser undescored. The forecast includes costs to restore assets to service and a $2.6 billion cash investment in HUMAIN.

Aramco Invests $2.6 Billion in HUMAIN

He described Aramco’s 49% stake in HUMAIN, backed by a $2.6 billion cash investment and the transfer of key AI assets, as a strategic move to strengthen its competitive advantage and accelerate AI-driven growth.

The investment combines Aramco’s technology infrastructure, more than 90 years of operational experience and low-cost, lower-carbon energy to meet growing demand for AI computing.

HUMAIN aims to develop an integrated AI platform spanning data centers, cloud infrastructure, models and applications, with plans to reach 3 gigawatts of data center capacity by 2030 and become a leading global exporter of AI services.