As the geopolitical conflict with Iran continues to escalate, the business outlook for global companies has cooled sharply.
2026-04-23 15:15:05
Currently, the escalating geopolitical conflict between the US and Israel and Iran is profoundly impacting global industrial chains and the market environment. Businesses across various sectors, including consumer manufacturing, cultural tourism, and mining, are issuing warnings. This geopolitical turmoil is not only driving up production and transportation costs and disrupting the global supply chain, but also continuously eroding consumer confidence, making the overall business outlook increasingly bleak.
In fact, even before the outbreak of this round of geopolitical conflicts in late February, global companies were already facing multiple operational challenges. Increased overseas trade tariffs, rigid rises in raw material costs, and persistently weak consumer demand in end markets created a cascading pressure. Entering a new earnings reporting cycle, companies have adopted a more conservative and cautious approach, and the continued deterioration of the external environment has further amplified the pressure on their survival and development.
While some leading companies have temporarily maintained their annual operating targets, their management generally admitted that due to the disruption of shipping in the Strait of Hormuz, core costs such as logistics and transportation and industrial raw materials have entered an upward trend, significantly increasing the uncertainty of industry operations and making it much more difficult for companies to predict the future medium- and long-term operating trends.
Geopolitical instability has directly led to rising raw material and logistics costs, with the chemical manufacturing industry being the first to be significantly impacted. AkzoNobel (AKZO.AS), the parent company of the well-known paint brand Dulux, stated that geopolitical conflicts have directly increased the company's overall supply costs. Only through product price adjustments and internal cost reduction and efficiency improvement measures has the company's current performance exceeded the market average.
The company's CEO, Greg Poux-Guillaume, said that the company's overall raw material costs will increase by more than ten percentage points due to the continued obstruction of passage through the Strait of Hormuz. The pressure from the cost increase will be fully released in the next two quarters.
Market research data shows that since the outbreak of the conflict, 21 companies have voluntarily withdrawn or lowered their annual financial and operational guidance, 32 companies have signaled price increases, and 31 companies have explicitly stated that the geopolitical conflict will bring substantial financial losses to their operations. High and volatile energy prices have become a core variable. Capital market practitioners generally believe that if the long-term uncertainties in energy and logistics continue to spread, various industries will be forced to pass on the pressure through price increases, capacity reductions, and lowered performance targets.
Larry Adam, Chief Investment Officer of Raymond James, stated that persistently high energy prices will continue to amplify risks to the global economy. First-quarter financial reports only reflect the minor impact of short-term geopolitical events; subsequent business plans and management judgments will better reflect the true pressure on the industry. Ultimately, the course of events depends on the duration of the conflict and whether the Strait of Hormuz, which handles a large volume of global oil and gas transport, can resume normal navigation as soon as possible.
The negative impact of supply chain disruptions is spreading across the industry, with the food sector experiencing a significant shock. While French food giant Danone (DANO.PA) achieved positive sales growth in the first quarter, the pace of growth slowed considerably compared to the end of last year. Company analysts attribute this to geopolitical conflicts disrupting cross-border transport of infant formula, coupled with regional product recalls, which collectively hampered the pace of business recovery.
The industrial support sector, cultural tourism, and aviation industries are also struggling. Elevator manufacturer Otis (OTIS.N) admitted that cross-border transportation delays and changes in trade policies have directly hampered the delivery of new equipment orders and market sales. The cultural tourism industry has been particularly hard hit. Rising aviation fuel prices have increased travel operating costs, forcing major airlines and travel companies to raise ticket prices and add fuel surcharges, and some routes have been forced to reduce operations. Coupled with the wait-and-see attitude of consumers due to geopolitical tensions, the recovery of the cultural tourism market has been interrupted.
German travel giant TUI Group (TUI1n.DE) has proactively lowered its full-year core profit forecast and suspended revenue guidance. In its announcement, the company stated that the unpredictable nature of the Middle East geopolitical conflict and the uncertain market outlook are suppressing consumer spending, resulting in a weak short-term recovery for the industry. United Airlines (UAL.O) also anticipates continued pressure on industry demand, with its second-half and full-year earnings performance falling short of market expectations.
Looking at the bigger picture, the geopolitical conflict in Iran has created a comprehensive chain of negative effects, continuously exposing the vulnerability of global supply chains, from industrial raw materials and logistics to end-consumer goods. Even some leading companies with strong pricing power and risk reserves cannot completely avoid the impact of external uncertainties. Under the triple pressure of rising energy prices, supply chain disruptions, and weakening demand, the recovery of global corporate profits has been forced to slow down. In the near future, the global real economy may continue to face a development dilemma of high costs and a bleak outlook.
Geopolitical conflicts are escalating across the board, significantly increasing the operational pressure on businesses worldwide.
In fact, even before the outbreak of this round of geopolitical conflicts in late February, global companies were already facing multiple operational challenges. Increased overseas trade tariffs, rigid rises in raw material costs, and persistently weak consumer demand in end markets created a cascading pressure. Entering a new earnings reporting cycle, companies have adopted a more conservative and cautious approach, and the continued deterioration of the external environment has further amplified the pressure on their survival and development.
While some leading companies have temporarily maintained their annual operating targets, their management generally admitted that due to the disruption of shipping in the Strait of Hormuz, core costs such as logistics and transportation and industrial raw materials have entered an upward trend, significantly increasing the uncertainty of industry operations and making it much more difficult for companies to predict the future medium- and long-term operating trends.
Production costs have risen sharply, and a wave of price increases is quietly spreading throughout the industry.
Geopolitical instability has directly led to rising raw material and logistics costs, with the chemical manufacturing industry being the first to be significantly impacted. AkzoNobel (AKZO.AS), the parent company of the well-known paint brand Dulux, stated that geopolitical conflicts have directly increased the company's overall supply costs. Only through product price adjustments and internal cost reduction and efficiency improvement measures has the company's current performance exceeded the market average.
The company's CEO, Greg Poux-Guillaume, said that the company's overall raw material costs will increase by more than ten percentage points due to the continued obstruction of passage through the Strait of Hormuz. The pressure from the cost increase will be fully released in the next two quarters.
Market research data shows that since the outbreak of the conflict, 21 companies have voluntarily withdrawn or lowered their annual financial and operational guidance, 32 companies have signaled price increases, and 31 companies have explicitly stated that the geopolitical conflict will bring substantial financial losses to their operations. High and volatile energy prices have become a core variable. Capital market practitioners generally believe that if the long-term uncertainties in energy and logistics continue to spread, various industries will be forced to pass on the pressure through price increases, capacity reductions, and lowered performance targets.
Larry Adam, Chief Investment Officer of Raymond James, stated that persistently high energy prices will continue to amplify risks to the global economy. First-quarter financial reports only reflect the minor impact of short-term geopolitical events; subsequent business plans and management judgments will better reflect the true pressure on the industry. Ultimately, the course of events depends on the duration of the conflict and whether the Strait of Hormuz, which handles a large volume of global oil and gas transport, can resume normal navigation as soon as possible.
Chain stores across multiple industries are under pressure, and the consumer and service sectors are deeply mired in difficulties.
The negative impact of supply chain disruptions is spreading across the industry, with the food sector experiencing a significant shock. While French food giant Danone (DANO.PA) achieved positive sales growth in the first quarter, the pace of growth slowed considerably compared to the end of last year. Company analysts attribute this to geopolitical conflicts disrupting cross-border transport of infant formula, coupled with regional product recalls, which collectively hampered the pace of business recovery.
The industrial support sector, cultural tourism, and aviation industries are also struggling. Elevator manufacturer Otis (OTIS.N) admitted that cross-border transportation delays and changes in trade policies have directly hampered the delivery of new equipment orders and market sales. The cultural tourism industry has been particularly hard hit. Rising aviation fuel prices have increased travel operating costs, forcing major airlines and travel companies to raise ticket prices and add fuel surcharges, and some routes have been forced to reduce operations. Coupled with the wait-and-see attitude of consumers due to geopolitical tensions, the recovery of the cultural tourism market has been interrupted.
German travel giant TUI Group (TUI1n.DE) has proactively lowered its full-year core profit forecast and suspended revenue guidance. In its announcement, the company stated that the unpredictable nature of the Middle East geopolitical conflict and the uncertain market outlook are suppressing consumer spending, resulting in a weak short-term recovery for the industry. United Airlines (UAL.O) also anticipates continued pressure on industry demand, with its second-half and full-year earnings performance falling short of market expectations.
Overall Summary
Looking at the bigger picture, the geopolitical conflict in Iran has created a comprehensive chain of negative effects, continuously exposing the vulnerability of global supply chains, from industrial raw materials and logistics to end-consumer goods. Even some leading companies with strong pricing power and risk reserves cannot completely avoid the impact of external uncertainties. Under the triple pressure of rising energy prices, supply chain disruptions, and weakening demand, the recovery of global corporate profits has been forced to slow down. In the near future, the global real economy may continue to face a development dilemma of high costs and a bleak outlook.
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