Oil past $90. Flights grounded. Food prices climbing. The war started on February 28 and within days it stopped being just a Middle East story.
The Strait Nobody Planned to Close
Twenty million barrels of oil move through the Strait of Hormuz every single day. That is roughly one-fifth of the world's oil supply passing through a waterway about 33 kilometres wide at its narrowest point. There is no real alternative route at that scale. None.
When the US and Israel launched strikes on Iran on February 28, the strait did not formally close. But shipping companies stopped sending tankers through it anyway. Insurance premiums on vessels transiting the Gulf shot up overnight. Several major carriers suspended Gulf routes entirely. The result was functionally the same as a blockade.
Oil prices that were sitting below $70 a barrel in late February touched nearly $120 before settling around $90 as of March 11. Qatar's energy minister put it plainly: if major Gulf producers are forced to declare force majeure on exports, it will bring down economies across the world. That is not dramatic language from a politician fishing for headlines. Qatar sits on one of the largest LNG reserves on the planet. He knows exactly what he is talking about.
The IMF calculates that every 10% rise in oil prices, held through the year, adds 0.4% to global inflation and strips 0.2% off world economic output. Prices are up more than 30% from where they were two weeks ago. That arithmetic falls on every country, whether they support this war or not.
India: Oil Bills, Gulf Workers, and a Squeeze Play
India imports over 85% of its crude oil. Around half of that, roughly 2.6 million barrels per day, comes through the Strait of Hormuz. When prices spike, the current account swings. The rupee weakens. Inflation feeds through to groceries, transport, and electricity. Every $10 per barrel increase changes India's fiscal picture in ways that are hard to paper over.
But the oil bill is only part of it.
About 9 million Indian nationals are working across the Gulf. Last year they sent home approximately $51.4 billion, which is 38% of India's total remittance inflows. Most of them work in construction, oil services, hospitality, and retail. Those are exactly the sectors getting hit hardest right now. Over 850 Gulf-bound flights were cancelled in just two days after Dubai and Doha suspended airport operations.
New Delhi also has an oil sourcing problem it did not create. Under the interim US-India trade framework signed in February, India committed to stop buying Russian crude as a condition for tariff relief. Russian supply is disrupted anyway now. Middle Eastern supply is disrupted. And Washington is watching closely what India does next. Fitch Ratings flagged India as one of the most exposed major economies to this energy shock, given how heavily it depends on fossil fuel imports relative to GDP.
S&P had projected 7% GDP growth for India in 2026. That forecast is now under serious review.
Pakistan: Already on the Edge
Pakistan was walking a fiscal tightrope before this war. Now someone kicked it.
The country imports 40% of its energy. A significant chunk of that is LNG from Qatar. Qatar's Ras Laffan facility was struck by Iranian drones and partially shut down. That supply is gone, at least for now. Pakistan does not have the reserves or the alternative sourcing to absorb that quietly.
Capital Economics analysts say Pakistan's central bank will probably be forced to raise interest rates rather than cut them. Why? Because the energy shock will push inflation even higher. A country that needed rate cuts to ease its debt burden is now staring at rate hikes instead. That is the kind of compounding pressure that breaks fragile economies.
There is also a security dimension. Pakistan and Saudi Arabia have a Strategic Mutual Defence Agreement. Iran has been striking Saudi oil infrastructure. That pact is now under quiet but real stress, and Islamabad is being pulled toward choices it cannot afford to make.
USA: Started the War, Now Paying at the Pump
America is a net energy exporter. Higher oil prices benefit US producers. They do not benefit the truck driver in Ohio filling up before a 6 AM shift.
The national average gasoline price jumped $0.43 in a single week to $3.41 per gallon. Several cities have already crossed $4, the highest since late 2023. Seven US service members have died in the conflict. The war Trump said would be over in four to five weeks is now widening into the Indian Ocean with no clear end date.
The Federal Reserve is stuck. It was already dealing with an economy squeezed by Trump's tariffs and stubborn inflation. Now there is an oil shock on top of all that, and a president publicly demanding interest rate cuts. Bloomberg Economics put the bind simply: the war puts the Fed in an impossible position. Midterm elections are in November 2026. Americans check the pump price every time they stop for gas. Those numbers have not been going down.
UK and Europe: Recession Is Not a Metaphor Anymore
European natural gas prices nearly doubled after Qatar's facility was struck. Bloomberg Economics said it plainly: sustained higher energy prices from this conflict would push Europe to the brink of recession.
The Bank of England had been on a path toward rate cuts. That path is now blocked. London's gas station signs are reflecting the shock in real time. AP photographs from March 9 show drivers standing at UK pumps doing visible double-takes at the numbers on the screen.
Chatham House estimates that if oil holds near $100 or above, the damage to European GDP compounds beyond anything the continent can easily absorb. Right now it is sitting around $90 and climbing.
Europe is not in this war militarily. France denied its bases to US operations. Spain did the same and received threats of economic retaliation from Trump for it. Italy is pushing for a joint EU-GCC diplomatic position. The continent is trying to stay out of the shooting, but it is still getting hit by the economic fallout regardless.
Egypt, South Korea, Bangladesh: The Bystanders Bleeding
Egypt's president declared something close to an economic emergency. Suez Canal revenues are down. Remittances are disrupted. Import costs are climbing. Cairo is reportedly threatening to prosecute price gougers in military courts. That is not a government managing a situation calmly. That is a government under real pressure.
South Korea's KOSPI index suffered its worst single-day crash since the 2008 financial crisis, falling 12% on March 4 before circuit breakers kicked in. South Korea imports virtually all of its oil. It had no role in this conflict. It has no say in when it ends. The market told the story anyway.
In Dhaka, motorists were photographed queuing for fuel on March 8, worried about shortages. Bangladesh is a low-income energy importer with almost no fiscal buffer. Higher fertiliser prices, much of which routes through Gulf supply chains, are pushing food costs up. The IMF's former chief economist said it without softening: low-income countries already facing agricultural stress will face food shortages because of this war. Not eventually. Soon.
Editorial View · Santhosh Vishwamitra
Nobody Asked These Countries. All of Them Are Paying.
India, Pakistan, South Korea, Egypt, Bangladesh. None of them had a seat at the table on February 28. They are not combatants. They have no vote on how or when this ends. They are absorbing oil shocks, currency pressure, cancelled flights, food inflation, and remittance risk. Because two powers decided military action was the answer and everyone else would sort themselves out.
For India, this is a test of what strategic autonomy actually means under pressure. New Delhi needs to secure its energy supply, protect 9 million Gulf workers, and avoid being squeezed between Washington's demands and a region on fire. India has enough diplomatic weight to demand a real voice in how this ends. Whether it uses that weight or stays quiet is the question. Silence is not neutral anymore. It costs money. It costs jobs. It costs rupees per litre, every day this war runs.
Verdict
The Iran war is eleven days old as of this writing. The Strait of Hormuz is effectively shut. Oil near $90. Flights grounded. Food and fertiliser costs spiking. Pakistan under debt pressure it cannot absorb. Egypt in near-emergency mode. South Korea just had its worst trading day since 2008. Bangladesh has fuel queues.
There will be a legitimate debate about whether these strikes were justified. That debate should happen. But separate from it is a simpler, harder fact: the people carrying the highest ongoing cost of this war are mostly the ones who had no say in starting it.
About the Author
Santhosh Vishwamitra is a writer and blogger covering geopolitics, global affairs, and technology. He is the founder of SVM Labs and the voice behind Inside Stories -- Where Global Politics Meets Perspective. For web development and writing, visit santhoshvishwamitrablog.wordpress.com.
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