Impact of US-Israel War on Global Markets and Economies
How two months of war in West Asia hit global markets and the economy
Hindustan Times
Image: Hindustan Times
The US-Israel war with Iran, which began on February 28, has resulted in significant human and economic costs, including an estimated $25 billion military expenditure and a death toll of 3,000 to 6,000 in Iran. The conflict has caused fluctuations in oil prices, stock markets, and bond yields globally, with varying impacts across different regions.
- 01The US military campaign has cost around $25 billion so far.
- 02Oil prices surged from $72.29 to above $100 per barrel due to the conflict.
- 03Equity markets reacted differently, with India's Sensex down more than 5%.
- 04Bond markets are facing pressure with rising yields due to inflation concerns.
- 05India's rupee weakened significantly, reflecting its heavy reliance on oil imports.
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Two months into the US-Israel war with Iran, the conflict has led to substantial human and economic tolls. The Pentagon estimates the military campaign has cost approximately $25 billion and resulted in a death toll in Iran ranging from 3,000 to 6,000. The war has significantly impacted global financial markets, particularly through rising oil prices. Brent crude futures jumped from $72.29 per barrel on February 27 to over $100 by mid-March, before fluctuating around $90 as ceasefire hopes temporarily revived. However, renewed fears of disruption in the Strait of Hormuz have pushed prices back up. Equity markets have shown mixed responses; while India's Sensex and European markets have fallen by more than 5%, the US S&P 500 has remained stable, buoyed by technology stocks. Higher oil prices have also affected bond markets, raising inflation expectations and leading to increased borrowing costs across major economies. In India, where over 85% of crude oil is imported, the rupee has depreciated from 91.08 to around 95 per dollar, reflecting the direct economic impact of the war.
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The ongoing conflict has led to rising oil prices, which directly impact India's economy due to its heavy reliance on oil imports. This has resulted in increased inflation and a weaker rupee, affecting consumers and businesses alike.
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