Friday marks half a year since the U.S. and Israeli bombing of Iran triggered a conflict that upended the entire region, disrupted global energy supplies and sent shock waves through global financial markets.
The conflict has affected everything, from oil production and prices to equities, safe-haven assets and food prices.
Oil prices soared as Gulf production was disrupted and shipments through the Strait of Hormuz curtailed. Brent crude briefly topped $120 in April and still averages about $90 in 2026, up from roughly $70 last year.
The biggest impact has been on refined fuels. Diesel prices have risen more sharply amid shortages of middle distillates, Russian refinery outages caused by Ukrainian attacks and lost Gulf export flows.
Jet fuel was initially hit hard given the Gulf's importance, though a surge in U.S. refinery output and exports helped ease supply fears.
With the Northern Hemisphere winter approaching, further disruption to Hormuz shipments coupled with risks to Russia's energy infrastructure could push up heating-oil and inflationary pressures.
Global stocks have largely shrugged off the war, buoyed by the trillions of dollars pouring into the AI sector.
MSCI's 47-country world stocks index hit a $105 trillion record high this month, gaining almost $7 trillion, or 9%, since the war erupted – though stocks in the Gulf region have underperformed.
Fidelity analyst Pranav Aggarwal said the broader rally suggested investors were taking a "relaxed view" and still expected the war to end this year.
"Equities are actually having a pretty good year," he said. "They're up 14% or so (for the year). If we are expecting 8% to 9% in a standard year, 14% up till August is pretty good."
None of the assets investors usually pick in times of trouble, such as highly rated government bonds, gold and the dollar, have played the traditional safe-haven role consistently.
The dollar has risen 1.4% against a basket of major currencies since the war began, though much of that reflects the Japanese yen's weakness, analysts said.
U.S. Treasuries – a traditional mainstay in portfolios – have lost 3.5% on a total return basis as higher inflation has dashed U.S. rate cut bets, while more recent concerns about new Federal Reserve (Fed) chief Kevin Warsh and Washington's surprise debt buyback plans have also weighed.
Gold fell nearly 25% between the start of the war and July – though it had more than trebled in price since 2022 when Western powers froze Russia's central bank reserves over the invasion of Ukraine.
Gold has rebounded more than 15% this month, however, amid renewed concerns about dollar debasement.
The closure of the Strait of Hormuz has also disrupted fertilizer shipments, a key input for global food production.
Combined with a strong El Nino and fresh disruptions to grain shipments linked to the war in Ukraine, analysts say the shock increasingly threatens agricultural output.
Food prices rose in July to a more than three-year high, according to the U.N. Food and Agriculture Organization (FAO). However, experts warn that much of the impact is yet to be felt.
The FAO has warned the world could be heading towards another bout of food inflation. JPMorgan estimates that a strong El Niño alone could, at its peak, lift global food inflation by around 0.7%.
The impact is likely to be felt most acutely in Asia, Latin America and Africa, where households spend a larger share of income on food and policymakers remain wary of renewed price pressures.
The direct hit to the Gulf has been stark. Saudi Arabia's exports shrank by 10% between the first and second quarters.
JPMorgan estimates Dubai's property sales have plummeted 70%-80%, and Oxford Economics warns Qatar's economy will shrink almost 30% this year, given the damage to its Ras Laffan gas facility.
Qatar and UAE stocks have both dropped around 14% – a more than 20 percentage point underperformance versus world stocks. The cost of insuring both countries' debt against a default has also risen, although more heavily indebted Bahrain has been hardest hit, with its credit default swap (CDS) prices up almost 40%.
