Tensions in Iran, which have been simmering for a long time, are threatening to escalate into a full-scale conflict, and experts estimate that up to 80% of British companies could be affected by the negative consequences of this event. This is not just a figure, but a serious indication of how interconnected global markets are today and how local geopolitical events can trigger a chain reaction that affects various sectors of the economy.

 Why is Iran so important for the global economy?

Iran holds a key position in the Persian Gulf, being one of the largest producers of oil and gas in the world. Any disruptions to supply from this region will immediately impact global energy prices. Despite its own energy resources, the UK remains heavily reliant on imported oil and gas.

 The ripple effect: How could a conflict in Iran impact British companies?

 Rising energy prices: This is perhaps the most obvious and direct consequence. A sharp increase in the price of oil and gas will lead to higher fuel costs for transportation, manufacturing, and heating. This will have a direct impact on:

Logistics companies: Increased fuel costs will lead to higher shipping costs, which will be passed on to consumers.
Manufacturing companies: Any business involved in manufacturing will have to incur additional energy costs, which could lead to lower profits or the need to raise prices.
Retailers: Higher prices for essential goods due to increased logistics and manufacturing costs will lead to lower consumer demand.
Construction sector: Prices for bitumen, plastics, and other petroleum products used in construction will also increase.
Disruption of supply chains: Iran is a major supplier and transit point for many goods. Any conflict could lead to:

Disruption of raw material supplies: British companies that rely on Iranian raw materials (such as the chemical industry and carpet manufacturing) will face shortages and will have to find alternative, more expensive suppliers.
Delays in delivery: A blockade or closure of sea routes in the Persian Gulf will lead to significant delays in the delivery of goods from Asia, affecting almost all sectors, from electronics to clothing.
Financial turmoil and market volatility: Geopolitical instability in an important region like the Middle East will inevitably cause panic in the financial markets. This could lead to:

Reduced investment activity: Companies and private investors will become more cautious, postponing major investments until the situation stabilizes.
Stock market declines: Stock markets tend to react negatively to geopolitical risks, which can lead to the devaluation of many British companies' assets.
Strengthening of the dollar and weakening of the pound sterling: During periods of uncertainty, investors often seek a "safe haven" in the form of the US currency, which can negatively impact the cost of imports for the UK.
Impact on the banking and insurance sectors: Increased geopolitical risks can lead to:

Increased insurance costs: Companies operating in high-risk areas or involved in international trade may face higher insurance premiums.
Restricted lending: Banks may become more cautious in providing loans to companies with higher-risk activities.
Loss of export markets: If the conflict leads to sanctions against Iran or neighboring countries, British companies exporting their products to these regions may lose a significant portion of their revenue.

 Which sectors will be most affected?

Energy: It is clear that companies directly involved in the extraction, processing, and transportation of oil and gas will be the most vulnerable.
Transportation and logistics: Rising fuel prices and potential disruptions in maritime transportation will pose significant challenges.
Manufacturing: Any sector that relies on imported raw materials or where energy costs account for a significant portion of production expenses.
Retail and consumer goods: Reduced purchasing power due to rising prices and inflation.
Construction: Dependence on energy and raw material prices.
Financial sector: Volatility in the markets and a decrease in investment activity.
What should British companies do?

In this situation, it is crucial to be flexible and proactive. Companies should:

Diversify their suppliers: Avoid relying on a single supplier, especially from unstable regions.
Look for alternative energy sources: Invest in energy efficiency and renewable energy sources.
Review their logistics routes: Explore more reliable and cost-effective delivery options.
Create reserve funds: Accumulate financial reserves to overcome possible crises.
Monitor the geopolitical situation constantly: Be prepared for rapid changes and make timely decisions.
May 26 may be the day when the consequences of the conflict in Iran become fully apparent. For 80% of British companies, this means being prepared for harsh economic realities. Success will depend on their ability to adapt, make unconventional decisions, and minimize their dependence on factors beyond their control.