LONDON, May 18 — The United States (US)-Israeli war with Iran has already cost companies around the world at least US$25 billion (RM99.37 billion), and the bill is climbing, according to a Reuters analysis.
A review of corporate statements from companies listed in the US, Europe, and Asia since the start of the conflict 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. Others have suspended dividends or buybacks, furloughed staff, added fuel surcharges, or sought emergency government assistance.
The upheaval — the latest in a series of discombobulating global events for business following the COVID-19 pandemic and Russia’s invasion of Ukraine in 2022 — is tempering expectations for the rest of the year with little sense that an agreement to end the conflict is forthcoming.
"This level of industry decline is similar to what we have observed during the global financial crisis and even higher than during other recessionary periods," Whirlpool chief executive officer (CEO) Marc Bitzer told analysts after it slashed its full-year forecast in half and suspended its dividend.
Analysts have also remarked that as growth slows, pricing power will weaken, and fixed costs will become harder to absorb, 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 are rather repairing them," Bitzer said.
Rising costs for many supplies
The appliance maker is not alone. Companies including Procter & Gamble, Malaysian condom maker Karex, 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 US$100 a barrel, more than 50 per cent higher than before the war.
The closure has driven up shipping costs, squeezed raw material supplies, and cut off trade routes vital to the flow of goods. Supplies of fertilisers, helium, aluminium, polyethylene, and other key inputs have been hit.
One-fifth of companies in the review, which range from cosmetics, tyre, and detergent manufacturers to cruise operators and airlines, have flagged a financial hit due to the war.
A majority were based in the United Kingdom 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.
Almost same as tariffs hit
To put the tally into context, hundreds of companies by October last year had flagged more than US$35 billion (RM139.1 billion) in costs from US President Donald Trump’s 2025 tariffs.
Airlines account for the largest share of quantified war-related costs, at nearly US$15 billion (RM59.62 billion), as jet fuel prices have nearly doubled. As the bottleneck drags on, more companies from other industries are sounding the alarm.
Japan's Toyota warned of a US$4.3 billion (RM17.09 billion) hit, while P&G estimated a US$1 billion (RM3.97 billion) post-tax profit blow.
Earlier this month, American fast-food giant McDonald's said it expected higher long-term cost inflation due to ongoing supply-chain disruptions, an assessment that, until recently, had been confined to industrial earnings calls.
Its CEO Chris Kempczinski said that the surge in fuel prices is hurting demand among lower-income consumers, adding that "elevated gas prices are the core issue we are seeing right now."
Oil price sensitivity
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.
Earlier this month, Newell Brands chief financial officer Mark Erceg said that every US$5 rise in per-barrel oil prices adds about US$5 million (RM19.88 million) in costs.
German tyre maker Continental expects a hit of at least €100 million (RM460.2 million) in the second quarter due to surging oil prices, which are making raw materials more expensive.
Similarly, Continental executive Roland Welzbacher said that it would take three to four months before it would affect 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 earlier this month.
Hit not showing up in earnings yet
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.
FactSet data has revealed that 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.
Goldman Sachs analysts have projected that European STOXX 600-listed companies will face margin pressure beginning in the second quarter, as it becomes harder to pass through higher costs and as hedging protection expires.
UBS head of European equity strategy Gerry Fowler noted that consumer-facing sectors, including autos, telecoms, and household products, are seeing negative revisions of more than five per cent for the next 12 months.
In Japan, analysts have halved estimates for second-quarter earnings growth to 11.8 per cent since the end of March.
"The true earnings hit has not yet materialised in most companies' results," said Cordoba Advisory Partners CEO Rami Sarafa.
