• • • The ceasefire is between the US and Iran and is not a regional peace —ÌýIsrael launched its heaviest strikes yet on Lebanon within hours of the announced deal. Iran hit oil infrastructure in Kuwait, the UAE, Bahrain, and Saudi Arabia — including the East-West Pipeline, the primary route for bypassing the Strait of Hormuz. Companies planning around a return to normal should instead plan around the idea that the war has narrowed, not ended.

    • If the disruption stays within one quarter, the economic damage is painful but reversible — The Dallas Fed projects WTI oil at roughly $98 per barrel with a modest GDP hit in a short-closure scenario. The catastrophic scenario — WTI above $132 with sustained negative growth — requires the closure of the war to drag past Q2. Every week the ceasefire holds improves the odds, but Iran’s strike on the Saudi bypass pipeline complicates even the optimistic timeline.

    • Iran may have stumbled into the most lucrative chokepoint tax in modern history — At conservative estimates, transit fees charged for traversing the Strait of Hormuz could generate $40 billion to $50 billion for Iran annually, or roughly 10% to 15% of Iran’s pre-war GDP — all at near-zero operating cost. That revenue stream inverts Tehran’s incentives. Indeed, keeping the toll system in place may now be worth more than restoring free transit.

On April 7, less than two hours before a self-imposed deadline that threatened the destruction of Iran’s civilian infrastructure, President Donald J. Trump announced a two-week ceasefire in the war in Iran that began on the last day of February and continued over 38 days of sustained air strikes by the Unites States and Israel. In turn, Iran carried out retaliatory attacks across over a dozen countries and forced the effective closure of the Strait of Hormuz.

With the ceasefire, all that has paused. Yet, the question every boardroom, general counsel’s office, and procurement team is asking right now is simple: How can I plan around this?

The honest answer is, not yet — and the first 24 hours have already shown why.

A fragile, but functional peace

The ceasefire is remarkably thin, and it’s based on three operative clauses: i) the US and Israel halt strikes on Iran; ii) Iran halts retaliatory attacks on the US and Israel; and iii) Iran allows “safe passage” through the Strait of Hormuz. Everything else — from nuclear terms, sanctions, reconstruction, and the legal status of Hormuz transit — has been punted to negotiations in Islamabad beginning April 10, with Pakistan mediating.

With the ceasefire, the question every boardroom, general counsel’s office, and procurement team is asking right now is simple: “How can I plan around this?”

However, what the ceasefire covers matters less than what it doesn’t. Within hours of the announcement, Israel launched its heaviest strikes yet on Lebanon, and Iran warned it would withdraw from the ceasefire if attacks on Lebanon continue. Meanwhile, Kuwait, the UAE, and Bahrain all reported fresh Iranian missile and drone strikes targeting oil, power, and desalination infrastructure after the ceasefire was in place. Most critically, Iran struck Saudi Arabia’s East-West Pipeline, the main route by which Gulf producers have been rerouting oil to bypass the blockaded strait.

That pipeline strike should command attention in every supply chain and energy risk briefing this week because it signals how shaky the agreement is, and that Iran remains a long-term threat to vital infrastructure across the region.

For companies operating in or sourcing from the Gulf, the practical implications are immediate. This is not a ceasefire that restores pre-war operating conditions; rather it is a bilateral pause between two belligerents while the regional war continues around them. Insurance premiums, shipping risk assessments, and supply chain contingency plans should reflect that distinction until there is a meaningful shift.

What does this mean for the next two weeks?

Both sides are claiming victory — and increasingly, claiming different deals. Trump called Iran’s 10-point proposal “a workable basis on which to negotiate”; and Iran’s Supreme National Security Council called the ceasefire a “crushing defeat” for Washington. The White House now says the 10-point plan Iran is publicly circulating differs from the terms that were actually negotiated for the ceasefire. Tehran, meanwhile, says there is no deal at all if Lebanon isn’t included — a condition the US has not acknowledged. And of course, the Strait of Hormuz remains closed.

These are not the hallmarks of a stable agreement; but they may be the hallmarks of a durable one. The deal is thin enough so that each side can brief its domestic audience on a different story, and as long as neither is forced to reconcile those stories publicly, the pause holds.

And the incentives to keep talking are asymmetric but real. The US has watched gas prices surge past $4 nationally as domestic support for the war — which started at levels best described as in a hole — continued to drop even further. Goldman Sachs raised its recession probability to 30% and JPMorgan to 35%, and every day the strait stays closed pushes those numbers higher. The administration needs the global economy to exhale and needs distance itself from a war so it can focus on other priorities, including an already difficult midterm election cycle.

With the ceasefire, all that has paused. Yet, the question every boardroom, general counsel’s office, and procurement team is asking right now is simple: How can I plan around this?

Iran, for its part, wants the bombing to stop. Its conventional navy has been functionally destroyed, its air defenses are highly degraded, its nuclear facilities have sustained severe damage, and its cities, bridges, and transportation networks have been hit repeatedly. The regime survived and arguably emerged with greater domestic legitimacy than it had before the war, but the physical toll is mounting. Tehran wants the strikes to stop so it can claim victory by survival without incurring any more costs.

This mutual exhaustion is the load-bearing structure of the ceasefire. If the ceasefire holds for 72 hours (as I think it might), and if the strait begins opening to escorted traffic by Friday as Iranian officials have signaled, and if neither side finds a reason to walk away before the Islamabad talks convene, then the ceasefire will likely be extended. Not because the underlying disputes get resolved, but because the cost of resuming hostilities exceeds the cost of continuing to talk. Expect a rolling series of extensions, probably 30 to 45 days at a time, that resolve nothing while letting global markets gradually stabilize.

As we wrote earlier this month, if the disruption remains limited to roughly one quarter, the oil price shock is painful but reversible, ugly, but manageable. And every week the ceasefire holds pushes the trajectory toward the manageable scenario.

What happens after the ceasefire?

Again, if the ceasefire holds, we then have to start thinking about how this conflict resolves. Not surprisingly, this is where it gets uncomfortable.

The conventional assumption in Washington and in global markets is that the Strait of Hormuz will return to normal once the fighting stops. That assumption underestimates what Iran has built.

Iran’s parliament is working to pass a Strait of Hormuz Management Plan, codifying its claimed sovereignty over strait transit and establishing a legal framework for collecting toll fees. Media reports indicate Iran has been charging vessels between $1 million and $2 million per transit and is planning to keep charging those tolls for all ships as the strait reopens. So, at $1 million per ship, and with up to 135 transits per day, 365 days a year, that’s about $40 billion to $50 billion in annual revenue for Iran, or up to 15% of Iran’s pre-war GDP. All at an operating cost that approaches zero.

Iran didn’t enter this war planning to build the most lucrative chokepoint tax in modern history, but it may have stumbled into exactly that.

Compare that to Iran’s oil sector, which generated approximately $53 billion annually in 2022 and 2023, required massive capital investment and maintenance, and was subject to constant disruption. The toll revenue is comparable in scale, dramatically cheaper to operate, and immune to sanctions. If the final number is even a fraction of this, it’s still a massive financial shot in the arm for Iran that could become a far greater advantage than the damage to capital that the war has inflicted upon the state.

Iran didn’t enter this war planning to build the most lucrative chokepoint tax in modern history, but it may have stumbled into exactly that.

Of course, this changes the structural incentives around the Strait of Hormuz in ways most analysts haven’t fully absorbed. A permanent toll system gives Iran a revenue base to rebuild the military assets it lost, reduce its dependence on oil exports, and fund domestic investment that could blunt future protest movements. The regime’s cost-benefit calculus has inverted: Keeping the toll operational in place may now be worth more than restoring the pre-war status quo.

For the US and Israel, the only way to dismantle this arrangement is by force and the last 38 days demonstrated the limits of that approach. The US achieved air and naval superiority, destroyed Iran’s conventional military, and killed the supreme leader. None of it was enough to compel capitulation, and in fact, may not have even come close. A second campaign faces the same likely result, against a population now unified by the experience of surviving the first one.

The war didn’t just disrupt global trade. It may have permanently repriced the most important shipping lane on Earth — and left every piece of energy infrastructure in the Gulf more vulnerable than it was before the first air strike landed.

Please add your voice to ³ÉÈËVRÊÓƵ’ flagship , a global study exploring how the professional landscape continues to change.Ìý

Key takeaways:

• • • Q2 is a wound that heals if the war stops — Oil spikes, inflation revisions, and supply disruptions are painful but mostly reversible in a short-war scenario. The exception is insurance and risk premiums for Gulf maritime transit, which are permanently repriced.

    • Q3 is a wound that scars — Sustained oil at $130 per barrel changes household and business behavior in ways that don’t snap back. Recession probability crosses the coin-flip threshold and supply chain disruptions cascade into industries far from the Gulf.

    • Q4 is a different body — Even if the war ends, the global economy has rebuilt itself around the disruption. Trade routes, supplier relationships, and risk models have been permanently rewired, especially if there is nothing structural to prevent the Strait from closing again.

This is the second of a two-part series on the impact of the war with Iran as the conflict continues. In this part, we’ll walk through what a quarter-by-quarter economic scenario would look like if the war continues.

Previously, we made the case that the US-Iran war is unlikely to end quickly. The regime hasn’t collapsed, the asymmetric force controlling the Strait of Hormuz is nowhere near neutralized, and diplomacy seems dead on arrival. Most significantly, the United States military is escalating, not winding down.

While the first part of this series was about the military and diplomatic picture, this piece is about your balance sheet.

What follows is a quarter-by-quarter map of what a prolonged conflict means for the global economy, charted from now through Christmas 2026. We’ll cover how oil, supply chains, GDP forecasts will be revised in real time, and how disruptions that look temporary in Q2 could trigger a permanent rewiring of how the global economy moves goods, prices risk, and sources critical inputs.

Even if your company doesn’t import a single barrel of Gulf crude, you could still get hit by this. Indeed, if you’re plugged into the global economy like the rest of us, you’re going on this ride.

Q2 2026 (April–June): The wound that heals

If the war ends by the close of the second quarter on June 30, most of the damage is reversible — painful, but reversible.

Brent crude is up about 60% since before the start of the war when it was roughly $70 per barrel; and Capital Economics , prices could fall back toward $65 by year-end. The interim outlook from the Organisation for Economic Co-operation and Development (OECD) now to be 4.2% for 2026, up sharply from 2.8%, assuming energy disruptions ease by mid-year. If that assumption holds true, it’s likely we’ll be able to muddle through the pain.

Even in the most optimistic scenario, however, Q2 introduces disruptions beyond oil that most people aren’t tracking. The Gulf supplies roughly 45% of global sulfur, and Qatar produces around one-third of the world’s helium, which is essential for semiconductor manufacturing. Further, Qatar’s liquified natural gas (LNG) production was significantly damaged by Iranian strikes.

Even in the most optimistic scenario, however, Q2 introduces disruptions beyond oil that most people aren’t tracking.

Further disruptions in fertilizer supply chains could delay spring planting, which could ripple into agricultural yields well into 2027. These effects don’t snap back the moment oil flow normalizes; they have their own timelines.

And here’s the one thing that doesn’t reverse even in the best case — risk premiums. The Strait of Hormuz was priced as a chokepoint that would never actually close. So when it did, that repricing is permanent and will be felt across the world as risk around other too important to fail chokepoints is itself reevaluated and priced higher.

Q3 2026 (July–September): The wound that scars

If a Q2 end to the war represents a recoverable spike, a Q3 end is where the word structural starts showing up in the discussion.

Capital Economics models Brent at roughly $130 per barrel — or roughly 14% higher than where it is now — in a prolonged scenario. At those prices, the damage stops being abstract. And Moody’s Analytics chief economist Mark Zandi estimates that every sustained $10-per-barrel increase . At $130 (nearly double pre-war levels) that’s approaching $2,700 per family. That is the kind of money that changes behavior.

In this case, Zandi says, especially if the cost of oil stays elevated for months — and by Q3, it would have. Moody’s recession probability model was pushing 50% in late-March when oil was $108 per barrel. At $130, the math speaks for itself.

Again, in this scenario, the damage fans out beyond energy. Fertilizer shortages hit crop yields, and helium disruptions cascade into semiconductors, automotive, and medical devices. The potential impact on AI-related manufacturing alone could spook investors already primed to see AI as a bubble. Capital Economics projects Eurozone growth at 0.5% and Chinese growth below 3%. Emerging markets could face forced rate hikes that deepen their own recessions.

This is the quarter in which contingency plans become operating assumptions. The question is no longer When does this go back to normal? —Ìýrather the question is whether normal is coming back at all.

Q4 2026 and beyond: The different body

Here’s what most forecasts don’t capture about a war that continues passed Q4: It almost doesn’t matter whether the war is still active or not. The damage has changed shape, and it’s no longer about what the conflict is doing to the global economy. Instead, it’s about what the global economy has done to itself in response.

Companies that spent Q2 and Q3 diversifying away from Gulf suppliers have now spent real money building alternatives. They are not going back to their pervious pathways even if there is a ceasefire. The sunk costs make the reversal unthinkable, and the memory of this conflict makes it irrational. No supply chain director is walking into a boardroom to recommend re-concentrating risk in a chokepoint that closed once and might close again.

The prudent approach for companies remains clear. They should plan for the war to last into at least Q2, probably Q3, with structural effects persisting beyond.

Because, of course, it could close again. If Iran emerges weakened but intact, which is the most likely outcome per multiple intelligence assessments, the result is a hostile state with every incentive to reconstitute its asymmetric capabilities the moment the pressure lifts.

Companies are thus going to reroute their future supplies around the Strait rather than through it. High oil prices and the potential for global shortage will also further accelerate green energy initiatives or alternate fuel sources across the globe as oil security reenters geopolitical calculations. Most importantly, every organization’s supply chain will need a reevaluation in light of an increasingly dangerous world, with expensive secondary supply chains becoming more a necessity than a luxury.

That’s the real legacy of a war continuing past the end of this year. Not oil prices on any given day or even insurance premiums, but the permanent repricing of an assumption. The war didn’t just disrupt the flow of goods through the Strait of Hormuz, it broke the premise that some geographies were too big to fail and would be protected and kept open. Once that premise is now broken so thoroughly companies will need to reevaluate whether the concentration of risk in individual areas is a luxury they can afford. Many will find the answer to be no, resulting in an increased push to diversify risk away from single points of failure.

The planning imperative

Fortunately, the best-case scenario remains possible. However, it requires Iran accepting terms it has publicly rejected as existential, its navy being neutralized despite retaining significant asymmetric combat capability, a coalition materializing from countries that have refused to send warships, and mine-clearance operations succeeding with the deck stacked against them. Only then, we’ll see if civilian traffic is willing to risk billions of dollars that the clean-up job was done right. Each is possible, but the odds remain slim.

The prudent approach for companies remains clear. They should plan for the war to last into at least Q2, probably Q3, with structural effects persisting beyond. They should model energy prices at between $120 and $150 per barrel, not $70. The smart companies are the ones building optionality now because the cost of flexibility is far lower than the cost of being caught flat-footed in September.

Four weeks ago, the assumption was that the Strait of Hormuz was too important to close. However, it did, and the assumption that it will reopen quickly deserves the same scrutiny.

You can find out more about theÌýgeopolitical and economic situation in 2026Ìýhere

Key takeaways:

• • • The supply hit is real, not just priced-in fear — Tanker insurance has collapsed, infrastructure is damaged, and volumes are physically offline. Some of this isn’t coming back quickly.

    • Tax policy is moving in five directions at once — Energy security incentives, BEPS 2.0 rollout, windfall tax rumblings — governments are improvising, and your effective tax rate is caught in the middle.

    • Your Evidence to Recommendations (EtR) guidance is probably already stale — If you haven’t stress-tested your EtR guidance against $100-plus per barrel oil and a multi-quarter disruption, you’re behind.

Let’s be direct: This isn’t a risky premium situation. When military strikes take out Middle Eastern infrastructure in the Persian Gulf and tanker insurers pull out of a corridor carrying 15% to 20% of global crude and liquefied natural gas (LNG), supply goes offline. That’s what’s happened.

At the time of writing, the price of oil continues to fluctuate. The recent release of the , which forecasts and analyze the global oil market, shows that more global markets are starting to say the word recession. And whether or not a recession actually materializes, the energy price environment has shifted in ways that will take multiple quarters, and maybe years, to unwind. For corporate tax departments, the question isn’t whether this changes their planning, it’s whether they’ve caught up yet.

Which scenario-modeling is most worth it?

Most ominously, nobody knows how this all ends, and that’s exactly why your tax team may need more than one base case.

The optimistic read is a short, sharp shock — prices spike, some flows resume, upstream books a windfall quarter, and consuming-country governments start muttering about excess profits taxes. Messy, but manageable.

The harder scenario is prolonged disruption: Hormuz remains constrained for months, along with repeated infrastructure hits with resulting rerouting that permanently shifts where profits land and which entities suddenly have a taxable presence for which they didn’t plan. Not surprisingly, transfer pricing and permanentÌýestablishmentÌý(PE) exposure get complicated fast.

Add to the mix, by the Organisation for Economic Co-operation and Development (OECD) that multinational corporate tax departments are still required to adhere to and now plan for how it may interact and intersect with the other two scenarios.

The policy environment is a mess, but in a very specific way

Here’s what makes this cycle different from 2008 or 2014: Governments are pulling in opposite directions simultaneously. The United States has pivoted hard toward energy dominance — domestic fossils, nuclear, extraction incentives. Meanwhile, BEPS 2.0 is still rolling out unevenly across jurisdictions, which means your organization’s effective tax rate in any given country depends heavily on where it sits in the implementation timeline.

Throw in — which historically shows up about six months after prices stay high and voters get angry — and you have an environment in which the gap between your statutory tax rate and your actual sustainable rate could widen fast if you’re not actively managing it.

5 actions tax team leaders can take now

Of course, none of these are new concepts; but in a fast-moving situation, the basics that get done quickly will beat the sophisticated that gets done late.

First, rebuild your EtR guidance around at least three commodity paths. Not as a theoretical exercise — as something your CFO can actually present to the board with a straight face.

Second, map out which legal entities are genuinely exposed to Hormuz-dependent flow volumes. Companies’ operations and trading teams often know this; but the tax team too often doesn’t until there’s a problem. Close that knowledge gap now.

Third, re-rank your project pipeline on a real after-tax basis. Updated incentive assumptions, global minimum tax, domestic versus cross-border production — run all the numbers again. Some projects that looked marginal six months ago may look very different now, and vice versa.

Fourth, build a windfall tax playbook before you need one. The data you’d need to defend your profit levels and capital allocation decisions takes time to pull together. Don’t leave that work until the week the legislation drops.

Fifth — and this is the one that gets skipped most often — make sure the company’s tax, treasury, and trading groups are talking to each other in real time. Hedging decisions, financing structures, physical flow changes — all of these have tax consequences, and they’re happening fast right now.

One final thought

Corporate tax departments that come out of this looking good won’t be the ones that predicted the conflict. They’ll be the ones who translated what’s happened into specific, actionable data and numbers for their leadership — presented quickly, clearly, and with their own company’s footprint in mind.

That’s the brief. Now go build it.

You can find more of our coverage of the impact of the ongoing War in Iran here

Key insights:

• • • Geopolitical crises fuel financial volatility and illicit activity — Conflicts have traditionally accelerated capital shifts and flows, creating cover for bad actors.

    • Predictable patterns emerge — Financial institutions should watch for sudden cross-border activity, unusual cash deposits, and transactions from border areas.

    • Conflict zones enable black market expansion — They also should adapt their compliance systems to detect more sophisticated methods used by criminals, tightening screening and enhancing staff training.

While business and international politics may appear cold and calculating, these things are often driven by emotion, especially fear — and fear of instability often drives market volatility.

So it goes as the United States attacks one of the world’s largest militaries and supporters of regional terror groups, causing deepening instability in a Middle East already beset by violence. It is certain that there is already a surge of money flowing in and out of the region for different reasons. Legitimate and illegitimate actors alike will seek to both run away from the crisis and profit from it. However, there are some anti-money laundering specific thoughts that financial institutions need to consider during a time of global uncertainty.

The bottom line — lots of money is on the move. Funding will send aid groups towards the crisis; it will also send logistical supplies, war material, and other necessities. All of these cost money, and defense sectors in multiple countries will be pumping out munitions to refill stockpiles in any country that is related to or in the neighborhood of the conflict.

Not every large transaction is an unusual, reportable event, but financial institutions now need to look one or two layers below the surface. What does not seem related on the surface is always a red flag. Look at beneficial ownership of companies and vessels, look at relations of the owners, not just the Ìý(OFAC) results of those people themselves. The financial system will, and should, allow the legitimate funds to flow. However, financial investigators must remain diligent to catch bad actors that take advantage of the surge in non-profit activity or the urgency with which legitimate businesses operate in a conflict zone.

Risk Factor 1: Capital flight from regime change

Just as the fall of the Al-Assad regime in Syria caused family funds to flow to as regime members fled the country, you will see the same with politically exposed persons (PEPs) who are inevitably fleeing regime change in Iran. A political crackdown will come. Whether the victors are on the side of the West or not remains to be seen, but some factions are going to flee the country and take family wealth with them.

Banks and other financial services should watch for anyone connected to people moving money through neighboring countries in which they may have literally hiked or driven before depositing cash into a financial institution. There are stories of refugees leaving places with gold bands on their arms, cash and false bottom purses, and diamonds in the lining of sweaters. These things will be converted to cash in neighboring countries and put into financial systems less affected by the conflict. An influx of cash throughout the region, therefore, could indicate this type of capital flight.

Risk Factor 2: Illicit finance and black markets

Since the fall of Syria, we have also become aware of that helps fuel addiction and armed conflict. There are certainly other substances and drug trafficking networks about which we know very little on this side of the secrecy veil.

Therefore, this instability will be seen as a time of opportunity for criminal groups. Indeed, with Assad’s security forces no longer controlling middle eastern captagon and other narcotics trade and various armed groups looking for funding sources, this is an illicit business opportunity.

Financial institutions can expect rapid movement of money between unrelated shell corporations, new corporations, and shadow vessels. They also should expect the black market to boom with drugs, contraband Iranian oil, and funds tied to narcotics that they have only yet to discover. Illegal arms will also generate funding, so all of the methods, both formal and informal, used to transfer value will become active.

In fact, large portions of such funding will flow through financial institutions; and peer to peer payment providers, FinTechs, and money transmitters should be especially wary of funds moving rapidly through their platforms. A burst in conflict means a burst in activity from illicit sources; therefore, enhanced, targeted monitoring is a must.

How financial institutions’ risk & compliance teams should respond

First, all financial institutions’ risk & compliance departments need to assess their institutions’ OFAC and sanctions screening search parameters. This is a good time to dial up fuzzy logic capability and reduce match percentage thresholds. In other words, risk tolerance should go down while the metaphorical dragnet gets wider. Surge the department’s personnel capability to compensate if you have to, because that is better than a strict-liability OFAC fine. Remember, OFAC sanctions are closely tied to national security, especially when it comes to Iran. This is not an arena in which leniency can be expected. Compliance teams should look at monitoring systems and thresholds immediately, create geographical targeting models to cover the conflict zone, and consider a command center approach to deal with the fluidity of the situation until things settle.

If your institution has not already taken the hint from regulators, this also is an opportunity to double down on Customer Due Diligence and identity verification. Front line staff and embedded business compliance personnel should receive updated training and job aids to increase awareness and hone internal reporting. Indeed, it is an advanced business skill to understand complex corporate beneficial ownership, much less to detect when it may be tied to illicit activity or corrupt regimes. Now is the time to increase that level of knowledge and thereby make the culture of compliance more robust.

In every crisis there is opportunity as well as risk: Managing the risk allows every company to take advantage of the opportunity, shore up its mission, and strengthen the institution.

You can find out more aboutÌýthe geopolitical and economic outlook for 2026Ìýhere

Key takeaways:

• • • The Strait of Hormuz crisis threatens a global recession — The effective closure of the Strait, which is being driven more by insurance withdrawal and risk perception than a physical blockade, has effectively halted roughly 20% of global petroleum flow. If this disruptions persist beyond 30 days, economic modeling points to overwhelming recession risk for major importing economies, with oil potentially reaching $100 to $200 per barrel depending on severity.

    • The world is facing an unprecedented dual-chokepoint shipping crisis — With the Strait of Hormuz effectively shut and the Houthis resuming attacks on the Suez/Bab el-Mandeb corridor, roughly one-third of global seaborne crude trade is compromised simultaneously. All five major container lines have suspended Hormuz transits, and the cascading delays will hit supply chains far beyond the Middle East, including those companies with no direct Gulf exposure.

    • Companies that act now will fare far better than those that wait — Supply chain disruptions propagate on a lag of two to four weeks, meaning that the pain from today’s anchored tankers hasn’t arrived yet. Businesses should immediately audit their Gulf supply chain exposure, secure alternative freight capacity before it disappears, and prepare for a significant escalation in cyber threats from Iran and its allies.

Just days into the largest military operation undertaken by the United States since the 2003 Iraq invasion, the potential closure of the Strait of Hormuz has triggered the most severe energy supply disruption since Russia’s invasion of Ukraine. The conflict with Iran has removed roughly 20 million barrels per day of crude from global markets and sent oil prices to above $80 as of press time. The conflict’s trajectory over the coming weeks will determine whether the world faces a manageable price shock or a full-blown recession.

How we got here

The February 28 strikes order by President Donald J. Trump followed weeks of negotiations around Iran’s nuclear program that ended without a deal just two days before the strikes began. Administration officials have since acknowledged that the timing was driven in part by Israel’s plans to strike Iran independently.

Iran’s Supreme Leader Ayatollah Ali Khamenei, age 86, along with his defense minister Brigadier General Aziz Nasirzadeh, the commander of the Islamic Revolutionary Guard Corps (IRGC), and approximately 5 to 10 senior Iranian officials, died in the opening salvo of the operation.

Even after the destruction of a large segment of Iran’s senior leadership, the war continues on. Hezbollah launched a rocket strike on March 3 with Israel initiating a ground invasion of Lebanon in response. Iran’s retaliation has extended across the region as drone and missile strikes have hit targets across Qatar, the United Arab Emirates (UAE), Kuwait, and Bahrain, while the US Embassy compounds in both Kuwait and Riyadh have been struck directly. Six American service members have been killed thus far.

Indeed, the regional escalation has given Iran the context to play one of the most feared cards in its arsenal — and one with the potential to throw an already fragile global economy into recession.

On March 2, Iran closed the Strait of Hormuz, vowing to attack any ship trying to pass through the strait. An European Union official said that began receiving VHF radio transmissions from the IRGC stating that no ships would be permitted to pass.

Ship-tracking data based on the MarineTraffic platform showed at least 150 tankers — crude oil and LNG vessels (those specifically built to transport liquefied natural gas — anchored in open Gulf waters. At least five tankers have been struck near the Strait, including one off Oman that was set ablaze, while the US-flagged tanker Stena Imperative was hit by two projectiles near Bahrain. On March 2, Marine insurers Gard, Skuld, and NorthStandard stated publicly they would effective March 5. One day later, four more of the 12 global insurance groups joined them, with London P&I Club, American Club, Steamship Mutual, and Swedish Club announcing similar moves.

Energy markets absorb the most severe supply shock in years

In light of 20 million barrels per day of crude being frozen out of the global markets, brent crude surged as much as 13% before settling at $83 per barrel, while WTI crude jumped to $76 at press time — both at their highest levels since the June 2025 conflict. Further, that several major oil companies and trading houses suspended shipments through the Strait as soon as strikes began.

“Unless de-escalation signals emerge swiftly, we expect a significant upward repricing of oil,” said , head of the company’s geopolitical analysis, citing the immediate impact of halting of traffic through Hormuz. UBS analysts warned clients that a material disruption scenario could send brent crude above $120 per barrel, while Barclays projected $100 per barrel as increasingly plausible. Just twenty-four hours later, that range has widened considerably. Goldman Sachs now models $120 to $150 per barrel in a prolonged war, JPMorgan sees $120 if the war lasts beyond three weeks, and Deutsche Bank’s worst-case approaches $200 if Iran mines the Strait.

OPEC+ announced a modest 206,000 barrel per day output increase for April, but as León told Reuters, markets are now more concerned with whether barrels can physically move than with spare capacity on paper. If Gulf export routes remain constrained, additional production provides limited immediate relief.

Global shipping faces an unprecedented dual-chokepoint crisis

While the energy supply shock is severe, it is only one dimension of a broader shipping disruption that has no modern precedent. For the first time in history, two of the world’s most critical maritime chokepoints are simultaneously compromised — the Strait of Hormuz and the Suez Canal/Bab el-Mandeb corridor, the latter under renewed threat after the Houthis announced they would resume attacks. Together, these two passages that connect Asia to Europe handle roughly one-third of the global seaborne crude oil trade and a significant share of containerized cargo. All five major container lines — Maersk, MSC, CMA CGM, Hapag-Lloyd, and COSCO — have suspended or halted transits through Hormuz and are rerouting via the Cape of Good Hope, adding weeks to voyage times.

The practical consequences for businesses extend well beyond higher shipping costs. The rerouting absorbs vessel capacity that was already stretched thin, meaning delays will cascade across trade lanes that have no direct connection to the Middle East. Companies that source components from Asia, ship finished goods to Europe, or depend on just-in-time inventory models should expect weeks — not days — of compounding delays.

Dubai, Doha, and Abu Dhabi — three of the world’s busiest air cargo hubs — are also facing disruptions, meaning the usual fallback of shifting urgent shipments to air freight is itself constrained. For affected companies, the window to secure alternative routing and lock in freight capacity is closing fast; those companies that wait for the March 5 insurance deadline to pass before acting will find themselves competing for scarce logistics options in a market where scarcity is already the defining feature.

3 scenarios and their divergent economic consequences

There are three most likely scenarios as this conflict unfolds, each with their own challenges and potential outcomes:

Scenario 1: Rapid regime collapse and quick normalization

Credible but unlikely in the near term, this scenario banks on the fact that Iran’s opposition is real — the protest movement of the last year or so has been the largest since 1979, and the regime’s legitimacy has been severely eroded by economic collapse and violent crackdowns. If internal collapse occurs, energy markets would normalize rapidly.

Brent crude would likely retreat to the $70 to $75 range within weeks as the primary disruption drivers — fear and insurance withdrawal, not physical blockade — dissipates. Tanker traffic would resume once insurers restore war-risk coverage.

Scenario 2: Prolonged conflict, Strait mostly reopened

This is the most likely outcome based on available analysis. Energy Aspects founder Amrita Sen said she expects oil prices to , noting it is unlikely Iran could maintain a complete closure. She assessed that the US and Israel possess the military capability to neutralize Iran’s ability to fully shut down the Strait but acknowledged that sporadic attacks on individual vessels are far harder to prevent.

This is the critical distinction: A full blockade is unsustainable against US naval superiority, but one-off tanker strikes create an insurance and risk environment that chills commercial traffic almost as effectively. In this scenario, oil prices remain very high before gradually declining as the U.S. Navy establishes escort operations and mine clearance, with an open question revolving around insurance companies’ willingness to insure floating barrels of flammable liquid sailing into an open warzone, even under escort. Asian refiners face weeks of constrained supply access.

Scenario 3: Sustained Strait closure for weeks or months

This is the catastrophic tail risk. Roughly 20% of global petroleum consumption and significant LNG volumes moves through the Strait daily, representing an estimated $500 billion in annual energy trade. Saudi Arabia’s East-West Pipeline and the UAE’s Fujairah pipeline offer bypass capacity, but these routes can absorb only a fraction of the 15 million barrels per day now stranded.

Capital Economics estimated that a sustained $100 crude price could add to global inflation. And UBS warned that if disruptions extend beyond three weeks, Gulf producers could exhaust storage capacity and be forced to shut in output, pushing brent crude into the $100 to $120 range if not substantially higher if a significant blockade is held for a long duration.

The economic modeling is unambiguous, however, showing that disruption beyond 30 days carries overwhelming recession risk for major importing economies.

What companies should be doing right now

Of course, the economic impact of this conflict will not arrive all at once. Supply chain disruptions propagate on a lag — the tankers anchored outside Hormuz today represent goods and energy that won’t arrive at their destinations in two to four weeks. Companies that wait until these shortages materialize before they develop contingency plans will find themselves competing for scarce alternatives alongside everyone else. The window to act is now, not when the pain becomes visible.

Audit your supply chain exposure immediately

Any inputs, components, or raw materials that originate from or move through the Persian Gulf are at risk — and that extends well beyond oil. For example, one-third of global fertilizer trade passes through the Strait of Hormuz, meaning agricultural and chemical supply chains face disruption as well.

Business leaders should identify their companies’ Tier 1 and Tier 2 suppliers that have Gulf exposure, assess existing inventory buffers, and begin conversations with alternative suppliers before demand for those alternatives spikes. And companies with operations dependent on Middle Eastern air hubs — such as Dubai, Doha, Abu Dhabi — should assume they’ll face weeks of disruption to business travel and cargo routing and therefore plan accordingly.

Prepare for a serious escalation in cyber threats

Iran and its allies — including Russia, which has condemned the strikes and has well-documented cyberwarfare capabilities — have historically used cyber operations as an asymmetric response to kinetic military action. Indeed, there are signs already emerging that such actions are already taking place.

US critical infrastructure, financial services, and professional services firms are all plausible targets. The steps to prevent this are straightforward but urgent: Companies need to ensure that multi-factor authentication is enforced across all systems, verify that endpoint detection and backup protocols are current, brief employees on heightened phishing and social engineering risks, and confirm that incident response plans are not just documented but actually ready to be exercised.

The cost of preparation is negligible; the cost of a ransomware attack or data breach during a period of global economic stress is not.

Peering through the fog of war

As the conflict’s economic aftershocks move from risk to reality, the companies that act decisively now by diversifying supply chains, securing logistics, and hardening defenses will not just weather the disruption, but emerge more resilient whatever the outcome.

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