Expanding War Triggers Energy Spike, Disrupts Global Air Travel
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The US-Israeli war on Iran reverberated through financial markets and travel, with energy prices surging, stocks falling and airlines around the world suspending flights.
Brent crude topped $85 today for the first time since July 2024 and the dollar rose as the conflict showed no signs of de-escalation, while stock markets around the world sank. The oil spike came as Iraq cut output at the giant Rumaila oil field and export disruptions in the Strait of Hormuz continued.
More than 12,300 flights have now been canceled, including at major transfer hubs such as Dubai and Doha, according to Flightradar24. Tens of thousands of passengers are stranded. The disruptions are expected to keep rippling through air travel as planes are left out of position and crew members in the wrong locations. The UAE is starting to establish what it called safe air corridors that will allow for as many as 48 flights an hour, potentially alleviating some strains.
Iran sent a fresh wave of missiles at countries including Qatar, Bahrain and Oman that host US bases. Israel said it struck the leadership compound in Tehran and sent soldiers into southern Lebanon, where the Iran-aligned Hezbollah militia is based. US President Donald Trump is open to supporting groups in Iran willing to help topple the regime, the Wall Street Journal reported.
The UK government expects weaker near-term economic growth even without the additional fallout from war breaking out in the Middle East. The Office for Budget Responsibility cut its forecast for economic expansion in 2026 to 1.1%, while also predicting lower borrowing and inflation. The OBR’s forecasts come as a YouGov poll showed the governing Labour party trailing both Reform and the Green Party, with its lowest rating ever.