Recent military strikes by the United States and Israel on Iran’s military and nuclear infrastructure have triggered a broader conflict across parts of the Middle East, including Lebanon, Israel, Syria and the Strait of Hormuz. Beyond the immediate human and geopolitical toll, the situation is feeding through to higher oil prices, shipping disruptions and greater uncertainty for the global economy.
Analysts at Cushman & Wakefield describe the economic impact as running primarily through energy prices. They note that oil price spikes have preceded most U.S. recessions, but typically only contribute to downturns when paired with tighter financial conditions. In parallel, Marcus & Millichap highlights the strategic importance of the Strait of Hormuz, which carries a substantial share of global oil consumption and liquefied natural gas trade, meaning even minor disruptions can quickly raise energy prices and transportation costs.
Marcus & Millichap also warns that some Gulf producers could suspend oil and LNG output if hostilities drag on, and that restarting operations could take weeks or months, amplifying supply shortages and price pressures. While the United States is less vulnerable to external energy shocks than in prior cycles due to stronger domestic production, consumers are already seeing higher prices at the pump. Cushman & Wakefield suggests that elevated prices weigh on households but also support U.S. energy producers, partially offsetting the shock over time, while foreign economies that rely more heavily on imports could face greater stress.
On the macro side, Cushman & Wakefield estimates that a sustained $30 increase in oil prices would push inflation roughly 0.5% higher, potentially reinforcing expectations for higher-for-longer policy rates. That in turn could keep bond yields and borrowing costs elevated. Marcus & Millichap adds that interest rates may remain volatile as investors balance inflation risks against weaker growth prospects and safe-haven demand for U.S. Treasuries.
The conflict’s reach extends beyond energy. Marcus & Millichap notes that the Strait of Hormuz also handles a meaningful share of global aluminum exports and a large portion of fertilizer trade, putting pressure on input costs for food, manufactured goods and industrial production. Higher shipping and commodity costs could erode consumer spending and elevate operating expenses, with particular strain on middle- and lower-income households.
For U.S. commercial real estate, both firms see near-term impacts as indirect given the geographic distance from the conflict. Cushman & Wakefield points out that if higher energy prices stall disinflation and delay anticipated interest rate cuts, tighter financing conditions could weigh on capital markets activity and deal flow. Elevated uncertainty also tends to dampen business confidence, which Marcus & Millichap suggests could slow hiring, leasing decisions and overall GDP growth.
Even so, the reports do not anticipate a severe, direct hit to U.S. CRE from the conflict alone. Cushman & Wakefield underscores that real estate has often remained relatively resilient during periods of geopolitical volatility, particularly when property income streams hold steady. Marcus & Millichap notes that reduced discretionary spending could challenge hospitality and non-essential retail, but also argues that commercial real estate may attract investors seeking stable income and diversification if volatility rises in equities, private credit or bonds.
