Therefore this might not end soon.
Geopolitical fallout in the Middle East—particularly conflicts impacting critical trade chokepoints like the Strait of Hormuz—forces a transfer of wealth directly from everyday consumers and struggling businesses into the balance sheets of multinational fossil fuel corporations and petrostates.
How the Crisis Taxes the Global Economy
• Soaring War Windfalls: As geopolitical risk premiums drive crude oil and natural gas prices upward, energy-producing corporations and traders reap massive excess profits.
During the first months of Middle East hostilities, it was estimated that the largest oil and gas companies banked excess profits of upwards of $30 million every hour.
• The "Fossilflation" Ripple Effect: High oil and gas prices act as a heavy, hidden tax on the entire global economy.
Because oil is the bedrock of global supply chains, inflated energy costs force airlines, automakers, and consumer goods companies to pay billions in additional fuel and transportation surcharges. Ultimately, these costs are passed down to working households in the form of higher prices at the pump, elevated heating bills, and more expensive food and retail items.
• The Wealth Transfer Cycle: Analysts estimate that Middle East oil and gas supply crunches have imposed hundreds of billions in additional costs onto the global economy, directly siphoning household spending power into the revenue streams of fossil fuel conglomerates.
Industry Response and Economic Impact
While Western oil giants have seen fluctuations in net earnings based on their specific trading and operational structures, many record spectacular surges in profit. For example, firms like BP and TotalEnergies have credited exceptional global oil trading contributions for massive profit jumps linked directly to market volatility in the Middle East. For further information on the broader economic effects of energy war profiteering, you can read the comprehensive report on Oil and gas war profiteering by Alex White
“Business activity in the U.S. grew at a steady pace in May while slowing in Europe and Asia as energy costs have risen, an indication that the global economy has been weakened by the fallout from the Middle East conflict.
The war has led to a sharp decline in shipments through the Strait of Hormuz, through which a fifth of the world's oil and natural gas supplies usually transit. As a result of reduced supplies, energy prices have jumped around the world.
S&P said its Purchasing Managers Index for the U.S. -- which measures activity in the services and manufacturing sectors -- was unchanged at 51.7 in May. A reading below 50 points to a contraction, while a reading above that threshold points to an increase in activity.
However, that resilience appeared to reflect a boost to manufacturing from businesses bringing forward purchases in an effort to avoid even higher prices in the future, or difficulties in securing needed products.
By contrast with the U.S., the PMI for the eurozone fell to 47.5 in May from 48.8 in April. In the U.K., the sharpest drop in services since January 2021 led to a decline in overall activity.
In the U.S., businesses reported that their costs rose at the fastest pace since November 2022, while the prices they charge in turn rose at the fastest pace since August 2022.” [1]
1. U.S. News: Middle East Fallout Taxing Global Economy. Hannon, Paul. Wall Street Journal, Eastern edition; New York, N.Y.. 22 May 2026: A2.
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