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.



Saudi Arabia Tightens Auto Dealer Obligations to Protect Consumers, Improve Ownership Experience

People are seen at the Riyadh Motor Show. (Riyadh Season)
People are seen at the Riyadh Motor Show. (Riyadh Season)
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Saudi Arabia Tightens Auto Dealer Obligations to Protect Consumers, Improve Ownership Experience

People are seen at the Riyadh Motor Show. (Riyadh Season)
People are seen at the Riyadh Motor Show. (Riyadh Season)

Saudi Arabia’s auto market is moving toward greater discipline and competition as the Ministry of Commerce steps up oversight of dealers, seeking to strengthen consumer protection and improve compliance with after-sales service requirements.

The ministry announced it had suspended an auto dealership, barred it from importing vehicles and fined it SAR 8.12 million ($2.1 million) after recording 175 violations. These included failure to provide spare parts and replacement vehicles to customers during maintenance, as well as other breaches involving consumer rights, the Commercial Agencies Law and its implementing regulations.

The ministry investigated the violations, contacted affected consumers and followed up to ensure they received their rights and due compensation, including replacement vehicles.

It also summoned the manufacturer, oversaw corrective measures and recall campaigns, and began transferring the brand to another dealer after verifying its readiness and ability to provide the necessary services.

Mohammed Al-Farraj, chief asset management officer at Arbah Capital, told Asharq Al-Awsat that Saudi Arabia’s large auto market and sustained demand make it one of the region’s most attractive, supported by population and economic growth, expansion of the non-oil economy and mega-projects, and growth in tourism and logistics.

The availability and variety of financing options play a key role in supporting demand, particularly because cars are a necessity for a large segment of the population rather than a luxury, Al-Farraj noted.

Market performance is influenced by vehicle prices, financing costs, income levels and supply, as well as competition among brands and the quality of after-sales services.

Al-Farraj described the ministry’s tougher oversight as a positive step toward protecting consumers and improving market discipline, stressing that a dealer’s obligations do not end with a sale but extend to warranties, maintenance, spare parts and replacement vehicles when needed.

Stronger after-sales compliance should bolster market confidence and gradually shift competition toward quality and reliability rather than price alone.

Al-Farraj expects intensifying competition to push dealers to focus more on the value offered throughout vehicle ownership, including total cost of ownership and customer service.


Mega-Projects, Investment Flows Draw Bank of Jordan to Saudi Arabia

A group photo of Bank of Jordan officials following the inauguration ceremony for the bank’s first branch in Riyadh. (Asharq Al-Awsat)
A group photo of Bank of Jordan officials following the inauguration ceremony for the bank’s first branch in Riyadh. (Asharq Al-Awsat)
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Mega-Projects, Investment Flows Draw Bank of Jordan to Saudi Arabia

A group photo of Bank of Jordan officials following the inauguration ceremony for the bank’s first branch in Riyadh. (Asharq Al-Awsat)
A group photo of Bank of Jordan officials following the inauguration ceremony for the bank’s first branch in Riyadh. (Asharq Al-Awsat)

Saudi Arabia’s appeal extends beyond rising foreign investment and expanding mega-projects to the banking sector, where institutions see the economic transformation driven by Vision 2030 as an opportunity to establish a long-term presence in one of the region’s fastest-growing markets.

Bank of Jordan Group’s entry into the Kingdom reflects growing interest among regional financial institutions in tapping the country’s expanding investment cycle.

The group opened its first branch in Riyadh on Monday, launching its financial and banking operations in Saudi Arabia. The move underscores the Kingdom’s ability to attract not only capital, but also financial institutions seeking to finance the next phase of investment.

Mega-projects, private sector expansion and growing foreign and domestic investment are creating significant opportunities for banks to provide financing solutions and services to companies and investors. At the same time, Saudi Arabia is seeking to deepen the financial sector’s role as a driver of growth and economic diversification.

Saleh Hammad, general manager of Bank of Jordan Group, told Asharq Al-Awsat that the bank’s strategy is based on a clear view of the economic transformations reshaping Saudi Arabia and the wider region.

The group has pursued carefully considered regional expansion, focusing on markets with sustainable economic fundamentals and strategic importance, with Saudi Arabia at the forefront.

Hammad said the Kingdom is undergoing an unprecedented economic transformation under Vision 2030, fueled by investment growth, private-sector expansion and the development of its financial and banking environment.

Establishing a presence in one of the region’s leading financial and economic hubs strengthens Bank of Jordan’s position as a regional institution capable of supporting trade, development and investment opportunities, he noted.

Hammad also highlighted Saudi Arabia’s strong banking system and evolving regulatory environment, supported by the Saudi Central Bank, as key advantages that enhance the group’s position while creating added value for clients and investors.


Gold Eases from Over Two-Month Peak, Inflation Reports in Focus

Ingots of 99.99 percent pure gold are placed in a workroom at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, January 31, 2023. (Reuters)
Ingots of 99.99 percent pure gold are placed in a workroom at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, January 31, 2023. (Reuters)
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Gold Eases from Over Two-Month Peak, Inflation Reports in Focus

Ingots of 99.99 percent pure gold are placed in a workroom at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, January 31, 2023. (Reuters)
Ingots of 99.99 percent pure gold are placed in a workroom at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, January 31, 2023. (Reuters)

Gold ticked lower on Tuesday after hitting its highest level in more than two months, while investors focused on upcoming inflation data for clues on the U.S. interest-rate outlook.

Spot gold was down 0.3% to $4,374.82 per ounce by 0548 GMT, after hitting its highest level since June 5 earlier in the session at $4,434.84.

US gold futures rose 0.4% ‌to $4,435.00.

Gold's move higher ‌in early session trading beyond $4,400 appears to ‌be ⁠driven primarily by ⁠renewed flows into the metal and a notable shift in the metal market sentiment, said Ahmad Assiri, Research Strategist at Pepperstone.

"If this change in sentiment continues to attract further flows, it could remain an important factor in determining whether gold can consolidate around $4,400 and potentially extend the recovery towards higher levels."

The US ⁠consumer price report due on Wednesday and ‌producer price data on Thursday are ‌likely to shape monetary policy expectations after weak July US jobs ‌data last week led markets to scale back bets that ‌the Federal Reserve would raise rates next month.

At its July meeting, the Federal Reserve kept rates steady, with three officials dissenting in favor of a hike.

Lower interest rates tend to support gold as ‌bullion pays no interest.

"If the data continue to point towards a cooling economy without a meaningful ⁠resurgence in ⁠inflation, markets could further reduce expectations for tighter policy. That would likely leave the dollar vulnerable and provide another supportive backdrop for gold," Fawad Razaqzada, a market analyst at Forex.com, said in a note.

On the geopolitical front, US President Donald Trump responded to Iran's conditions for a peace deal with his own demands that Iran pay compensation for people killed in wars, attacks and protests, in a rhetorical escalation likely to complicate efforts to reopen the Strait of Hormuz.

Among other metals, spot silver fell 1.7% to $64.64, platinum lost 0.4% to $1,745.68 and palladium declined 0.8% to $1,372.44.