Global companies face mounting losses as the U.S.-Israel war against Iran drags on, with cumulative costs reaching at least $25 billion since the conflict began. According to Reuters analysis of regulatory filings and earnings disclosures from listed companies in the United States, Europe and Asia, at least 279 firms have responded to the war's impact through price hikes, production cuts, and suspensions of dividends and share buybacks. Some companies have even considered unpaid leave for employees and requested government support. As the prolonged war pushes up international oil prices, shipping costs and raw material prices simultaneously, defending profitability is becoming increasingly difficult for businesses. Brent crude oil continues to hover at $90-$100 a barrel after the closure of the strategic Strait of Hormuz, through which about a fifth of the world's oil and liquefied natural gas usually passes.
The aviation industry has been hit the hardest, with war-related losses among airlines amounting to about $15 billion as jet fuel prices have nearly doubled from pre-war levels. As reported by Reuters, some airlines have raised fuel surcharges, while others have suspended dividend payments and share buybacks. Across the U.S., gas prices are at their highest level since 2022, with the national average hitting $4.30 a gallon on Thursday, compared with $2.98 before the war started, according to AAA. That's a 44% increase since the U.S. and Israel attacked Iran on Feb. 28. Diesel prices have surged to an average of nearly $5.50 a gallon, up from $3.76 before the war, making transportation of everyday goods more expensive. Major U.S. carriers including Delta, United, American and Southwest have raised checked baggage fees, with United expanding its pay-for-what-you-want model and American adding fees for seat assignments even for elite loyalty members.
Consumer goods maker Procter & Gamble flagged a potential after-tax profit decline of about $1 billion due to the war's impact, with the company warning last week that the war would cause a $1 billion hit to profits during its next fiscal year. McDonald's warned that cost inflation pressure could intensify if supply chain disruptions persist. According to FactSet, the second-quarter net profit margin forecast for S&P 500 industrial companies has been revised down by 0.38 percentage points since the end of March. UBS analyzed that 12-month earnings forecasts for consumer goods sectors including automobiles, telecommunications and household products have been lowered by more than 5%. London-based Unilever, which makes everything from Dove soap to Hellmann's mayonnaise, plans to raise prices around 2% to 3% in small doses, with CFO Srinivas Phatak noting that many of the company's products and packaging are made of resin or other petroleum-based materials. Companies are treating the situation as one of the biggest global risks since the COVID-19 pandemic and Russia's invasion of Ukraine.
Indian FMCG products may become costlier due to the Iran-US conflict as companies use up their buffer raw material stocks and shipments of key ingredients, including crude oil and oil-derived products, slow down because of global tensions. According to reports from Worldpanel by Numerator, Brent crude oil continues to hover at $90-$100 a barrel after the closure of the strategic Strait of Hormuz. As reported by Deloitte South Asia, persistent crude oil-linked inflation could keep companies cautious on pricing, margins and expansion plans. Fuel accounts for roughly 15% to 30% of the total cost of food, according to the Independent Grocers Alliance, with about 30% of the world's fertilizer shipments typically passing through the Strait of Hormuz. The U.N. World Food Program estimates that 45 million additional people – the majority of whom live in Asia and Africa -- could tip into hunger if the war doesn't ease by the middle of this year, potentially bringing the global total of people facing food insecurity to 363 million, the highest level on record.
2026 is shaping up to be a year of disciplined growth rather than exuberant expansion, according to Worldpanel. Rural growth was slower than urban growth, with urban consumption growing at 6.4% while rural was above 4%. As reported by Grant Thornton Bharat, FMCG companies have flagged further single-digit price hikes amid continued inflationary pressure. FMCG household consumption volume growth may slow amid economic uncertainty, with experts noting that companies that had good volume growth in Q4 of FY26 may not be able to sustain it this year. If macroeconomic headwinds ease, FMCG household consumption volume growth could potentially touch 5% from 5.4% in the March quarter, led largely by household care and personal care categories. The U.S. Postal Service has implemented a temporary 8% charge on some services including Priority Mail, while Amazon added a 3.5% fuel and logistics surcharge on third-party sellers to offset fuel price increases. The Lufthansa Group has announced plans to cancel about 20,000 flights across its network over the next six months.
