US-Israel Conflict With Iran Disrupts Global Oil Supply and Raises Living Costs

The conflict that began on 28 February has killed several thousand people across multiple countries and triggered sharp increases in fuel and food prices worldwide. Iranian authorities reported more than 3,300 deaths and over 33,000 injuries from US and Israeli strikes, along with damage to 240 health facilities, 20 schools, water infrastructure, and five world heritage sites.

Lebanese authorities reported more than 3,700 deaths from Israeli operations in Lebanon, which have also displaced over one million people. Additional deaths include more than 100 in Iraq, about 50 in Israel, at least 15 US military personnel, and dozens of Palestinians in Gaza and the West Bank.

The International Energy Agency stated that the conflict created the largest supply disruption in the history of the global oil market after Iran closed the Strait of Hormuz, through which about 20 percent of world oil and gas previously moved. Jet fuel prices have doubled, thousands of flights have been cancelled, and one US airline has ceased operations.

Oil prices rose sharply before falling by a few dollars after the peace deal announcement. The International Monetary Fund and World Bank lowered their global growth forecasts, and economists at Goldman Sachs estimated that US growth would be 0.5 percentage points lower due to the conflict.

A Pentagon official estimated in May that the conflict had cost $29 billion by that point. Toyota reported a £3 billion financial impact from higher material costs and reduced sales.

The UN estimates that 32 million people could be pushed into poverty, largely through higher energy and fertiliser prices. In Asia, restaurants have closed due to shortages of cooking gas, petrol stations are rationing fuel, and more than 800 ships with roughly 20,000 crew members remain stranded.