Investing.com \u2014 The economic impact of the Iran war is shifting into a more complex stage as the initial market shock fades and broader disruptions begin spreading through global commodity markets, according to analysts at BCA Research.<\/p>\n
The firm said the conflict\u2019s market effects typically unfold in three phases: the \u201cinitial shockwave,\u201d the \u201cripple effects,\u201d and eventually a longer-term \u201cbackwash.\u201d Analysts believe the first phase has largely passed, with markets now entering the ripple effects stage where supply disruptions and policy responses begin to affect a wider range of commodities.<\/p>\n
Global energy markets have already reflected this transition. In the early days of the conflict, the biggest movements were concentrated in commodities directly exposed to disruptions in Middle Eastern supply routes, including crude oil, refined fuels and natural gas. These markets surged as traders reacted to risks around shipping through the Strait of Hormuz, one of the world\u2019s most critical energy chokepoints.<\/p>\n
The strait handles a significant share of global seaborne oil and fuel shipments, making it highly sensitive to geopolitical tensions in the Gulf. Even the threat of disruption can quickly tighten supply expectations and push prices higher in global markets.<\/p>\n
BCA said the initial rally was largely driven by logistical constraints rather than outright production losses. Tanker traffic slowed and shipments became harder to route, creating a temporary squeeze in global supplies.<\/p>\n
However, the conflict is now entering a more damaging stage. As storage capacity fills and shipments remain disrupted, Gulf producers may be forced to reduce output, turning a transport problem into a production shock.<\/p>\n
At the same time, governments are increasingly prioritizing domestic energy security. Measures such as export restrictions and stockpiling could tighten global supply further, amplifying price volatility.<\/p>\n
The ripple effects may also spread beyond energy markets. Higher fuel and natural gas prices can raise fertilizer costs and transportation expenses, potentially pushing up agricultural prices and other commodities.<\/p>\n
While measures such as strategic petroleum reserve releases and demand reductions could ease some pressure, BCA said uncertainty around the war\u2019s duration continues to create significant volatility for commodity markets.<\/p>\n
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