Oil Nears $100 as Mideast Tensions Mount

HSBC executives said on Tuesday that the ongoing conflict in Iran is undermining global economic confidence, as companies weigh rising risks and uncertainty in their planning. Georges Elhedery, HSBC’s chief executive, told a conference in Hong Kong that the conflict is adding to uncertainty that is already weighing on sentiment. He said the effects could extend well beyond the Middle East through shifts in the prices of goods and key inputs.

Elhedery pointed to potential spillovers across oil and refined products, as well as fertilizers and metals, describing a broad channel through which the conflict could influence costs for businesses and consumers globally. He said the conflict has contributed to greater volatility in commodity markets. In oil trading, Brent crude moved sharply: after rising above $100 a barrel on Monday, it fell 0.9% to $98.5 a barrel on Tuesday.

Several companies have linked the Middle East conflict to a more uncertain outlook across multiple regions. Imperial Brands and UK recruitment company PageGroup cited the conflict as a factor contributing to uncertainty affecting markets in the UK, Europe, the Middle East, and Asia. The comments reflect how geopolitical shocks can quickly become a cross-border business issue, influencing hiring, investment decisions, and pricing strategies across sectors.

Cost pressures are also being reported in manufacturing supply chains tied to petroleum-based inputs. Garment manufacturers, including sportswear company Castore, said costs have risen by 10% to 15% because petroleum-derived fabric prices have increased. Castore said those higher costs could be passed on to consumers if the conflict continues, highlighting how energy-linked inputs can feed into retail pricing and household budgets.

HSBC Chairman Brendan Nelson said a Middle East peace deal is critical for the resumption of global energy flows. He warned that if disruption persists, the result would be higher energy costs, increased inflation, and weaker economic growth. His remarks framed energy availability and transport as central transmission mechanisms from the conflict to the wider economy.

Airlines are also watching fuel costs closely. Virgin Atlantic CEO Corneel Koster said jet fuel prices are more than double pre-war levels, describing an impact on global energy prices that is not easily reversed. While the duration and scope of the conflict remain uncertain, the statements from executives and the moves in oil prices underscore how quickly geopolitical instability can translate into volatility, higher input costs, and broader pressure on confidence across regions.