The latest escalation in the Middle East is already rippling through global trade, disrupting shipping routes and driving up energy prices after US and Israeli strikes on Iran on 28th February.
A key point of concern is the Strait of Hormuz, a strategic maritime passage along Iran's southern coast. Around 20 percent of the world's oil and a similar share of liquefied natural gas (LNG) typically transit through the narrow waterway. Roughly 150 vessels had reportedly dropped anchor in the strait, including tankers carrying oil and natural gas, reflecting growing uncertainty among shipping operators.
The disruption has also affected port operations across the region. Several Middle Eastern ports temporarily suspended activity following drone strikes, while DP World, the leading Dubai-based multinational logistics company, confirmed that operations at Dubai's Jebel Ali port were halted after a fire caused by an aerial interception, according to reports.
Additionally, energy markets have reacted quickly to these developments. Brent crude, the international oil benchmark, rose by as much as 13 percent in early trading on 2nd March, briefly surpassing $82 per barrel as traders responded to concerns over potential disruptions to energy supplies from the Gulf.
The World Economic Forum explains that the immediate economic impact is likely to be felt most strongly in energy-importing economies across Europe and Asia, which rely heavily on shipments from the Gulf.
If tensions escalate further or shipping through the Strait of Hormuz is disrupted for an extended period, higher energy prices could translate into renewed inflationary pressure and supply chain volatility.