Economists are now assessing the economic fallout from the Middle East conflict after a year of modeling Trump's trade war. The most immediate impact is market-driven as investors flee to safe havens like the dollar and gold, causing stocks to slump and leaving smaller economies with limited foreign exchange reserves particularly vulnerable.

Oil prices have surged as the main transmission mechanism to the global economy. Brent crude jumped 13% to above $82 a barrel - the highest since January 2025 - while West Texas Intermediate neared $72 in early Asian trading. Iran supplies about 5% of global oil, and a complete outage could lift prices by approximately 20%, according to Bloomberg Economics analysts Ziad Daoud and Dina Esfandiary.

Major oil importers including China, Europe, and India would suffer from sustained higher prices, while exporters like Russia, Canada, and Norway would benefit. Chinese refiners are particularly exposed since they import an estimated 99% of Iranian exports, equivalent to about 13% of Chinese seaborne crude imports in 2025. TD Securities analysts note that "the Middle Kingdom would lose another source of cheap barrels" as Russian Urals crude could see increased demand from India and China.