• Former President Donald Trump asserts the U.S. has conducted more than 7,000 strikes on Iranian and allied targets, highlighting the intensity of the ongoing air and missile campaign.
  • The conflict has effectively closed the Strait of Hormuz, disrupting about 20% of global oil trade and spiking Brent crude prices by 10–13% to around $80–82 per barrel.
  • Global stock indices, including the Dow Jones and S&P 500, have sold off, while inflation pressures mount and Asian economies face heightened risks.

Escalation and Economic Shockwaves

Former U.S. President Donald Trump’s claim that the United States has struck over 7,000 targets in Iran and allied areas underscores the scale of a conflict that has rapidly escalated since late February 2026. According to people familiar with the matter, the sustained U.S.-Israel campaign has targeted military, nuclear, and command-and-control sites in Iran, along with IRGC units and militias in Iraq, Syria, Lebanon, and Yemen. Iran’s retaliation, including missile and drone attacks on U.S. bases in the Gulf and the effective closure of the Strait of Hormuz, has sent shockwaves through global energy markets and supply chains.

Efforts to contain the crisis have hit a snag, with airspace closures over much of the Gulf and parts of the eastern Mediterranean grounding thousands of flights and slashing tourism. Without a swift resolution, analysts warn that prolonged disruptions could push oil prices above $100 per barrel, exacerbating inflation and growth headwinds. JPMorgan (JPM) estimates that a 30% sustained rise in oil could add roughly 0.3 percentage points to U.S. inflation and cut growth by about 0.45 percentage points over a year—a notable but not recession-scale hit if the shock is temporary.

Market Turmoil and Regional Fallout

Financial markets have reacted sharply to the developments. In early March, the Dow Jones fell over 400 points and the S&P 500 dropped about 0.7% in one session, while European and Asian markets lost 1–2%. Airline and tourism-exposed stocks plummeted, while gold and the U.S. dollar gained as safe-haven assets. “What institutional investors are really focused on is stability, and right now, that’s in short supply,” one market strategist said, echoing concerns about regulatory and geopolitical uncertainty.

In the region, Iran’s GDP is expected to contract by more than 10%, according to Chatham House, based on war experiences elsewhere. Civilians face disruptions to fuel, electricity, and basic goods, with tourism-dependent Gulf economies suffering from flight cancellations and service sector job losses. Iran has floated allowing only yuan-settled cargoes through Hormuz, a move that could tilt energy flows toward China and modestly challenge dollar dominance in oil trade—though most analysts still see the dollar as dominant in the foreseeable future.

Global Implications and Policy Responses

The conflict’s energy shock is reshaping Asia–Middle East economic linkages, with Asian import-dependent economies like Thailand, Philippines, Pakistan, and Sri Lanka facing strong inflation and exchange-rate pressures due to their reliance on Middle Eastern energy and fertilizers. Shipping disruptions at Hormuz have stranded Asian exports, such as Thai and Indian agricultural cargoes bound for the Middle East, forcing some producers to dump goods domestically at lower prices. Insurance, shipping, and aviation risk premia have risen, increasing costs across global supply chains.

Asian governments are coordinating fuel-saving measures and contingency planning, illustrating the widespread impact. In the U.S., higher fuel prices complicate macroeconomic management, narrowing the Federal Reserve’s room for rate cuts and fueling debate over whether the scale of strikes is proportionate to the economic costs. A source close to the discussions noted that the duration and intensity of Hormuz disruptions are key variables: a brief shock yields limited macro damage, but a long closure could significantly weaken global trade and raise recession risks, especially in Europe and Asia.

Correction: An earlier version misstated the timing of market reactions; they occurred in early March, not late February.