The Iran war is placing unbearable pressure on global capitalist enterprises.

Data shows that Europe and the UK have become the absolute epicenters of impact, with a total of 130 companies forced to adopt defensive measures—such as lowering profit forecasts or raising product prices—a number far exceeding that of other regions. This once again confirms Europe’s vulnerability amid surging energy prices. Asia and the United States follow closely behind, with 61 and 59 companies respectively taking responsive actions, reflecting these two major economies’ high dependence on Middle Eastern energy and global supply chains. Meanwhile, 18 companies in Australia and New Zealand were affected, and seven others across Canada, Latin America, and parts of the Middle East were also impacted. Overall, this chart clearly maps the geographical spread of war-related costs—centered on Europe and radiating outward to major global economies. Crude Oil Price Sensitivity Nearly 40 multinational corporations in the industrial, chemical, and materials sectors have explicitly stated that, due to their supply chains’ heavy reliance on petrochemical products from the Middle East, they will be compelled to raise end-product prices in response to the current situation. The destructive force of this cost pass-through is both direct and severe. Mark Elseg, CFO of consumer goods manufacturer Newell Brands, recently calculated for the public: for every $5-per-barrel increase in international oil prices, the company’s operating costs rise by approximately $5 million. German tire giant Continental AG (Continental Tires) has likewise issued a pessimistic earnings warning. Soaring crude oil prices have directly driven up procurement costs for upstream raw materials, and the company expects to face at least €100 million (approx. $117 million) in financial impact starting from Q2 this year. Regarding the lag effect of this cost pressure, Continental executive Roland Welzbacher provided a clear timeline. He noted that price increases for raw materials typically take three to four months to fully flow through to the company’s final income statement. He bluntly stated that the first signs of this financial blow are likely to emerge by the end of Q2, escalating into a full-blown profit crisis in the second half of this year. This pie chart illustrates how the $25 billion in additional corporate costs triggered by the Iran conflict are distributed across key industries. Aviation fuel cost surges dominate the picture. The aviation industry bears an extra $15 billion in losses—over half the total—primarily due to jet fuel prices nearly doubling. Second is the automotive and auto-supply-chain sector, absorbing $5.45 billion in losses, underscoring the global auto manufacturing industry’s fragility amid energy crises and logistics disruptions. Third is the consumer goods sector, suffering $2.41 billion in losses due to rising raw material and transportation costs. The cruise and shipping industry faces a direct financial impact of $1.36 billion. A negligible remainder falls under the category “Other.” Actual Impact Has Not Yet Appeared in Earnings Reports Although soaring energy costs are aggressively eroding profits—and inflation concerns continue pushing bond yields upward—Q1 earnings reports from major global corporations remain surprisingly “resilient.”

How will the Iran war-driven surge in U.S. borrowing costs—reaching a 2024 high—affect its fiscal and economic outlook?

The Iran war has become an ‘accelerator’ of U.S. economic decline: persistently surging borrowing costs are worsening an already precarious fiscal and economic situation. I. Manifestations of Soaring Borrowing Costs Since the U.S.-Israel joint military campaign against Iran began in 2026, U.S. Treasury yields have surged across the board, registering the largest monthly gain since October 2024. ・The 2-year Treasury yield jumped 55 basis points to 3.94%. Sharp rises in short-term rates are most sensitive to Federal Reserve monetary policy adjustments. ・The 10-year Treasury yield rose 44 basis points to 4.38%, significantly increasing global borrowing costs. ・The 30-year Treasury yield climbed to 4.90%—a critical indicator of long-term financing costs and a ‘barometer’ of market confidence in future economic prospects. This sharp rise signals mounting future inflationary pressures. ・The 30-year mortgage rate surged to 6.3%, directly dampening real estate investment. Traditionally, geopolitical conflicts trigger a flight-to-safety demand for U.S. Treasuries, causing yields to fall. This time, however, the opposite occurred: the Iran war triggered sustained selling of U.S. Treasuries and a counterintuitive yield surge—reflecting deep market anxiety over the U.S. fiscal outlook. In plain terms, it reveals a profound lack of confidence in the U.S. economy’s future—the deadliest consequence of the U.S.-Israel–Iran war. II. A Dramatic Reversal in Monetary Policy Expectations Before the war, markets widely anticipated two to three Fed rate cuts in 2026, reflecting relatively optimistic fiscal and economic expectations. After the outbreak of hostilities, interest-rate expectations underwent a complete 180-degree reversal, extinguishing hopes of near-term easing. Fed Chair Jerome Powell stated that further rate cuts would require clearer evidence of progress on inflation. The timing of the next cut has been pushed back to 2027, and even a rate hike in 2026 remains possible. This dramatic shift in monetary policy expectations stems directly from war-induced energy price spikes and the resulting change in inflation expectations. III. Energy Price Surges and Inflationary Pressures The Iran war has damaged Middle Eastern energy infrastructure and disrupted shipping through the Strait of Hormuz, triggering a sharp oil price surge. ・Average gasoline prices across the U.S. rose approximately 35%, reaching $3.98 per gallon! ・Aviation fuel prices soared 106%, prompting multiple airlines to announce fare hikes.

RPM International Expects Iran Conflict to Hit Costs Hardest Early in Fiscal 2027

Jul 23, 2026

RPM International reported record Q4 2026 earnings and expects strong demand, despite raw material inflation from the Iran conflict impacting costs in early fiscal 2027.

Sahm

2026-04-23

Fairway Wealth LLC Reduces Stake in RPM International Inc.

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Vanguard Capital Management Holds 5.23% Stake in RPM International Inc

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Horizon Investments LLC Acquires New Stake in RPM International Inc.

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Citigroup Maintains Buy Rating on RPM International, Raises Price Target to $128

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Royal Bank of Canada Forecasts Strong Price Appreciation for RPM International Stock