The Iran war is no longer just an oil-market story, it is showing up in factory costs, service activity and corporate guidance around the world. New surveys on Thursday showed the sharpest strain in Europe, where the euro zone’s composite business index slipped below 50 in April, while companies from food to elevators are already flagging shipment disruption and a financial hit.
The pressure is working through the economy in a familiar way: higher fuel bills, tighter supply chains and, in some cases, panic buying ahead of expected shortages. In the euro zone, the input price gauge jumped to 76.9 from 68.9, while the services sector fell back into contraction; in the United States, activity held up better, but delivery times and output prices climbed to levels last seen during the post-pandemic supply shock.
That leaves policymakers and companies facing a longer adjustment than the market rally around a temporary reopening of the Strait of Hormuz might suggest. Reuters counted 26 companies that have withdrawn or cut guidance since the war began, and the International Monetary Fund has already trimmed global growth to 3.1 percent this year, warning of a worse scenario if shipping disruptions drag on.
The bigger risk is that the damage outlasts the fighting. Oxford Economics said one in four businesses it surveyed expects the disruption to continue beyond year-end, which would keep pressure on inflation, investment and food costs even if energy flows stabilize in the near term.
