March 26 - Military operations by the United States and Israel targeting Iran have triggered a cascade of business disruptions worldwide, affecting the movement of people and goods, lifting energy prices and squeezing supplies of inputs that underpin sectors from semiconductors to beverages.
Below is a sector-by-sector account of the impacts reported so far.
Travel chaos and air freight bottlenecks
Air travel has been severely disrupted. Tens of thousands of flights have been cancelled, rerouted or otherwise adjusted as airlines avoid much of the Middle East's airspace amid missile and drone threats. The scale of the interruption to aviation is being compared to the shock waves that followed the pandemic, with major transit hubs such as Dubai International Airport - the world’s busiest for international passengers - particularly affected. The choke point in Middle Eastern airspace has forced passengers onto private jets, long ground transfers across desert routes to Saudi Arabia and alternative itineraries to reach home.
Time-sensitive air cargo has suffered alongside passenger traffic. Shipments that depend on rapid transit - ranging from fresh produce to aircraft parts - are being delayed as capacity tightens and freight rates climb, putting pressure on supply chains that rely on just-in-time delivery.
Airlines under pressure from fuel and route changes
Airlines are flagging substantial cost increases tied to spiking jet fuel prices and longer routeing. Jet fuel, the second-largest cost for carriers after labour, has doubled since the start of the conflict, adding hundreds of millions in extra operating costs for some carriers and prompting warnings about fare increases and route reductions.
Low-cost and full-service carriers alike are reacting: some are forecasting higher ticket prices later in the summer, while reports have suggested that major carriers could look to raise fares by large margins to offset the surge in fuel costs. Hedging arrangements that once insulated airlines from price shocks are being tested as firms announce fuel surcharges and cuts to capacity, and route restrictions in the Middle East are amplifying pressures on carriers that depend on those corridors. Indian airlines, which rely on the region as a key path to Europe and the United States - particularly after last year's ban on Indian carriers using Pakistan airspace - have been singled out as vulnerable to tighter access. India has said it will revoke temporary fare caps on domestic tickets that it had imposed in December.
Germany's Lufthansa has indicated that the conflict may erode the advantage Gulf carriers such as Emirates and Qatar Airways enjoy on Asian routes, reflecting anticipated shifts in competitive dynamics driven by altered route structures and airspace closures.
Cruise lines, tourism and the Middle East's image
The cruise industry is also facing higher fuel bills. Analysts point to Carnival Corp as particularly exposed because it is the only major U.S. cruise operator that does not hedge its fuel costs, making it vulnerable to sharp increases in fuel-related spending and to potential hits to 2026 earnings.
More broadly, the conflict threatens the Middle East's positioning as a safe, high-end travel destination. Tourism in the region is valued at some $367 billion annually, and closures or reduced staffing at shops and hospitality venues in major hubs underscore the risk to that revenue stream.
Defense production and military posture
The United States has deployed a range of advanced munitions and aircraft in strikes against Iranian targets, including Tomahawk cruise missiles, stealth fighters and, for the first recorded time in combat, low-cost one-way attack drones. The Pentagon also used artificial intelligence services from Anthropic, specifically its Claude tools, in conducting an attack. On March 25, the Pentagon reached framework agreements with BAE Systems, Lockheed Martin and Honeywell to increase production of defense systems and munitions, stating an aim to place the U.S. military on a "wartime footing." These moves indicate efforts to scale supply chains for defense hardware in response to heightened operational demand.
Critical metals, chemicals and energy flows
Disruptions in and around the Strait of Hormuz are constraining flows of metals and energy. Aluminium producers in the Gulf have halted shipments, declared force majeure or rerouted exports, pushing prices and premiums higher. The Gulf region supplies about 8% of the world's aluminium, and the interruption is reverberating through markets.
Helium prices have surged after disruptions to natural gas processing in Qatar, highlighting how a small market can be vital to industries that include semiconductor manufacturing and medical imaging. Indonesian nickel producers that depend on sulphur from the Middle East are facing potential production cuts. Chemicals companies including Celanese, Dow and Ecolab have raised prices for some products in response to constrained supply chains. Iranian attacks have also reduced Qatar's liquefied natural gas export capacity by 17%, with potential consequences for energy consumers in Europe and Asia.
These supply shocks and the broader rise in fuel costs are forcing policymakers and industry participants to rethink exposure to oil and gas imports. The higher price of gasoline stemming from the conflict is likely to affect consumer choices and could accelerate interest in electric vehicles and hybrid models, according to market observers.
In downstream manufacturing, brewers in India have warned of shortages because gas availability has tightened, driving up the cost of glass bottles. Shipping delays and supply interruptions for aluminium used in can manufacturing have also been reported. Shortages of naphtha and elevated energy costs have led companies such as South Korea's Samyang Foods and other snack, cosmetics and toy producers across Asia to warn of packaging shortages and rising input costs.
Pharmaceuticals and medical supplies
The movement of critical medicines into the Gulf has been disrupted, endangering supply lines for cancer therapies and other temperature-sensitive drugs. Companies are rerouting flights and arranging overland transport alternatives to maintain deliveries. Industry executives report that, while major shortages are not yet widespread, that situation could change if the conflict continues.
Apparel, luxury goods and consumer staples
Some consignments of garments destined for major clothing retailers were stranded at airports in Bangladesh and India early in the conflict, reflecting the knock-on effects on fast fashion supply chains that depend on South Asian factories for a steady stream of seasonal items. Luxury groups, including Richemont and Zegna, were identified among those with significant exposure to disruptions.
In India, restaurants and hotels are warning of operational disruptions and potential temporary closures as cooking gas shortages spread, prompting households to pivot to electric induction stoves. Packaged water producers have increased prices to distributors, and multiple sectors dependent on petrochemical feedstocks have reported risks to production owing to shortages of naphtha and higher energy costs.
Semiconductors, data centres and technology infrastructure
Officials in South Korea have warned that a prolonged military confrontation could interrupt shipments of specialty materials associated with semiconductor production, including helium, which has no practical substitute in some chip-manufacturing processes. Drone strikes that damaged portions of Amazon's data centre footprint in the UAE and Bahrain have also prompted questions about the vulnerability of technology infrastructure and the pace at which global cloud providers expand into geopolitically exposed regions.
Bank operations and staffing
Banks with operations in the Gulf have taken steps to protect personnel and assets. Citigroup and Standard Chartered instructed Dubai staff to work from home, and Citigroup is keeping most of its UAE branches and offices closed until further notice. HSBC closed all branches in Qatar and the UAE until further notice. U.S. hedge fund Millennium Management is reported to be exploring relocation options for staff unwilling to return to Dubai, with Jersey cited as a potential alternative.
Outlook and constraints
Across sectors, companies and governments are responding in real time to changing logistics, security and pricing dynamics. Many of the measures under way - from route changes to production adjustments for chemicals, metals and gas-dependent industries - are reactive steps to maintain continuity. Several executives and officials have cautioned that while some shortages are not yet pervasive, prolonged conflict could deepen disruptions and create more acute scarcities in critical inputs and medicines.
The current picture is one of wide-ranging operational stress across travel, energy, manufacturing inputs and finance, with knock-on effects that could persist if the security situation remains unsettled.