How a Potential Israel–Iran Conflict Could Reshape Oil Prices, Global Trade, and Financial Flows
- Andrew andytilley1@gmail.com
- Jun 14, 2025
- 3 min read
Rising tensions in the Middle East—particularly between Israel and Iran—are more than just geopolitical flashpoints. For global businesses operating across commodities, shipping, and international trade, such events have deep economic consequences. One of the most immediate and far-reaching impacts? Oil prices.
In this blog, we explore how a sharp rise in oil prices driven by regional conflict could affect commodity markets, supply chains, and the global payments and FX industry.
Oil Price Surge: The First Domino
A conflict involving Iran—a key player in OPEC and one of the world’s largest oil producers—would almost certainly lead to supply disruptions in the Strait of Hormuz, through which around 20% of global oil passes daily.
A spike in oil prices would:
Drive up transport and freight costs
Create price volatility in oil-linked commodities (e.g. fertilizers, plastics, agricultural goods)
Spark inflationary pressure in energy-dependent economies
For businesses in import/export, this means rising operational costs and shrinking margins, especially in fuel-intensive sectors like shipping, aviation, and manufacturing.
Commodity Markets: Volatility and Hedging Risks
Rising oil prices tend to ripple across broader commodity markets. Fertilizer and food production (heavily dependent on petrochemicals) could see price hikes. Industrial metals and agricultural products might also be impacted due to shipping bottlenecks or rerouted supply chains.
For commodity traders, this introduces:
Greater hedging pressure and margin call exposure
Increased counterparty risk in cross-border trades
Difficulty locking in prices across volatile delivery windows
This turbulence creates liquidity risks and increases the need for multi-currency settlement flexibility and secure payment routing.
Impact on Shipping & Trade Finance
With higher fuel prices and war premiums added to insurance and freight, the shipping industry may see:
Increased freight rates and delivery delays
Trade route realignments away from risk zones (e.g. Red Sea/Suez)
Strains on working capital and letter of credit (LC) financing
Shipping companies and traders may find themselves navigating not just logistical risks, but also payment delays, reputational risk, and sanction exposure—especially if the conflict escalates and sanctions extend to regional banks or shipping firms.
FX Markets & Cross-Border Payments: A Pressure Test
In times of conflict, emerging market currencies tend to weaken while safe havens (USD, CHF, Gold) rally. Volatility spikes can lead to:
Slippage and FX losses in unhedged transactions
Delays or freezes in cross-border settlements through regional banks
Heightened scrutiny from compliance and AML departments
For payment service providers and FX firms, there's increased demand for:
Faster settlement mechanisms
Multi-rail payment infrastructure (SWIFT, SEPA, crypto, stablecoins)
Access to multiple banking partners, particularly Tier-1 institutions in London, New York, and Europe
The Strategic Role of Financial Infrastructure
As the macro landscape shifts, financial flexibility becomes a competitive advantage. Businesses with access to diversified FX channels, multiple settlement currencies, and redundant banking solutions will be better equipped to:
Mitigate currency risk
Ensure business continuity
Maintain trust with suppliers and clients across volatile regions
At Multibanx, we help companies and financial institutions prepare for uncertainty by connecting them with a global network of over 50 financial partners.
This enables:
Access to Tier-1 named accounts in USD, EUR, GBP
Support for cross-border payments across commodities and trade corridors
Crypto and stablecoin solutions for faster, borderless settlements
If you're seeking guidance on how to protect margins, secure your payments flow, and access reliable financial rails during uncertain times, Multibanx is here to help.
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