If you were hoping the economic turbulence from the Middle East war would settle down soon, Donald Trump just made sure that’s not happening.
Speaking with his usual bluntness, the US President said American forces plan to keep striking Iran for another two to three weeks — and his choice of words, “back to the Stone Ages,” was enough to send oil markets into a frenzy. That single statement wiped out any lingering optimism traders had been holding onto, and the numbers that followed were brutal.
Oil Prices Explode — Again
West Texas Intermediate, the main US oil benchmark, surged 11.6 percent to hit $111.71 per barrel. International benchmark Brent North Sea crude wasn’t far behind, rising 6.7 percent to $107.86 per barrel.
To put that in plain terms: petrol, diesel, cooking gas, shipping costs, airline tickets — everything tied to oil just got significantly more expensive for billions of people around the world, most of whom have nothing to do with this war.
Stock markets felt the jolt too. Asian exchanges closed sharply lower across the board. European and US markets did claw back some losses as the session wore on — partly because of the three-day weekend ahead, which tends to reduce panic selling — but the mood is fragile. One more escalatory statement from Washington or Tehran could tip things back into the red.
Wall Street Banks Lock Down in Paris
The war isn’t just moving oil prices. It’s moving people — literally.
Citigroup and Goldman Sachs have both told their Paris-based staff they can work from home after French authorities reportedly stopped an attack targeting a US financial institution. Prosecutors in Paris suggested the plot may have had links to a pro-Iran group, though no final conclusions have been made public yet.
It’s a strange image — two of the world’s most powerful banks quietly telling employees to stay home in one of Europe’s most glamorous cities, because the fallout from a war thousands of miles away has reached their doorstep. But that’s where we are.
The Strait of Hormuz: A Global Chokepoint Under Threat
Roughly 20 percent of the world’s oil passes through the Strait of Hormuz. When that waterway is disrupted, everyone pays — from factory owners in Germany to rickshaw drivers in Bangladesh.
The Gulf Cooperation Council’s secretary-general has now formally asked the UN Security Council to authorize military force to protect the strait from Iranian interference. Bahrain has put forward a draft resolution that would allow member states to use “all necessary measures” to keep shipping lanes open.
The problem? China, Russia, and France — all of whom hold veto power on the Security Council — have reportedly raised objections to the current text. Without their sign-off, any UN-backed enforcement action is dead in the water. Negotiations are ongoing, but given the political complexity involved, a swift resolution seems unlikely.
Iraq Reroutes Oil Through Syria — A Sign of Desperation
Here’s a detail that tells you just how severe the disruption has become: Iraq, one of the world’s major oil exporters, is now trucking crude oil through Syria because the Strait of Hormuz has become too risky to rely on.
For context, Iraq depends on oil for roughly 90 percent of its government revenues. Nearly all of that oil was, until recently, exported through the Strait. Now, with that route essentially closed off by the war, the country has been left scrambling.
The numbers are stark. Iraq’s oil export revenues in March dropped more than 70 percent compared to February. That’s not a minor dip — that’s a fiscal emergency. The oil ministry confirmed it has begun exporting by tanker truck through Syria, with Damascus pledging to ensure safe passage.
Whether that arrangement can scale to meet Iraq’s needs is another question entirely.
The Philippines Gets a Lifeline — For Now
With 116 million people and almost no domestic oil production to speak of, the Philippines is one of the countries most exposed to this crisis. Last week, President Ferdinand Marcos declared a state of national energy emergency, warning that “nothing was off the table” as his government tried to keep fuel flowing.
There’s been some relief. Iran has reportedly pledged to allow safe passage for Philippine oil shipments through the Strait of Hormuz — a small but meaningful diplomatic development that could ease the immediate pressure on Manila.
Whether that pledge holds as the conflict continues is, of course, uncertain. But for now, it’s a rare piece of good news in an otherwise grim picture.
Bangladesh: Cooking Gas Just Got 29% More Expensive Overnight
For ordinary families in Bangladesh, the impact of a war in the Middle East isn’t an abstract economic concept — it showed up in their kitchen this week.
The government hiked prices of liquefied petroleum gas by 29 percent. A standard 12-kilogram LPG canister, the kind used for cooking in millions of homes, jumped from 1,341 taka to 1,728 taka — roughly from $10.90 to $14.05.
Bangladesh imports 95 percent of its oil and gas. It has almost no buffer to absorb price shocks like this. For a country of 170 million people, many of whom live on tight budgets, that kind of overnight increase in cooking costs isn’t an inconvenience — it’s a genuine hardship.
European Governments Move to Shield Consumers
Governments in Europe are trying to limit the damage, though the tools available to them are limited.
The Czech Republic and Romania both announced cuts to excise taxes on diesel this week. The Czech government went a step further, putting a cap on the profit margins of fuel distributors — a move designed to stop companies from using the crisis as an excuse to pad their earnings at consumers’ expense.
They’re not alone. A growing number of countries are rolling out similar measures, trying to act as a cushion between volatile global energy markets and their own populations. It helps at the margins, but it doesn’t fix the underlying problem — which is a war with no clear end date.
The Bigger Picture
What we’re watching unfold is a slow-motion economic crisis spreading outward from the Middle East, touching countries that have no role in the conflict but no way to insulate themselves from it either.
Oil at $111 per barrel. A UN Security Council deadlocked over the Strait of Hormuz. Iraq trucking oil through Syria. Bangladesh families paying 29 percent more to cook dinner. Paris bankers working from home. Czech governments slashing fuel taxes.
These aren’t isolated stories. They’re connected chapters of the same unfolding crisis — and with Trump signalling weeks more of military action, there’s no obvious reason to think we’ve seen the worst of it yet.
EconomyAffairs.com will continue tracking the economic impact of the Middle East war as developments unfold.
