On Saturday, in the aftermath of a surprise attack on Iran from Israel aimed at destroying the former’s nuclear capabilities, the U.S. launched its own attack on Iran. In the days since, the conflict between the three nations has only escalated and drawn in more nations, as Iran fired missiles at a U.S. base which were intercepted by Qatar.
Much of the world has watched the conflict unfolding with anxiety and dread. Notably, a YouGov poll of Americans released on Sunday found 85% were against the U.S. escalating a conflict with Iran. In addition to humanitarian concerns, further conflict in the Middle East has global implications, including for the fashion industry. The main risk that market analysts are predicting is a global rise in energy costs due to the conflict obstructing important shipping lanes, which would disrupt a market where many consumers are already cutting back on discretionary spending.
“If, for example, the Iranians were to blockade the Strait of Hormuz, it would impact roughly 20-25% of the world’s oil and natural gas market,” said Matt Klink, a political consultant and founder of Klink Campaigns who has advised clients in 35 countries on six continents. “But, such a blockade would also damage the Iranian economy. Energy costs would skyrocket around the world because oil and natural gas are global commodities, and traditional supply lines would be temporarily disrupted.”
Klink said the U.S. wouldn’t feel the worst effects of rising energy costs, since it gets much of its oil from domestic production and nearby countries like Canada and Mexico. But the Strait of Hormuz, a waterway near Iran that the country could block as retaliation for the attacks, is where a quarter of the world gets its oil, and a blockade would significantly affect important luxury markets like Asia.
The U.S. government issued a global travel warning for Americans abroad with risk of Iranian retaliation against American civilians, and airspaces across the Middle East have been closed. This is happening just as the region has become a hotbed for luxury fashion ambitions. Zegna just hosted a blockbuster show in Dubai earlier this month. And the Gulf region saw its luxury sales grow by 6% over the last year to $12.8 billion, making it one of the strongest luxury markets in the world.
Babak Hafezi, adjunct professor of international business at American University, told Glossy that turmoil in international waters could have an impact on global shipping, which is already under pressure from the U.S. tariff rollout.
“Shipping lanes could be impacted, especially in the Persian Gulf and the Red Sea via Iran’s proxies in Yemen,” Hafezi said. “This would materially impact supply and shipping lines, increasing insurance costs and shipping costs, and delaying shipping to both Europe and the U.S. by about a week. Furthermore, any plastic materials that are derivatives of petroleum [which includes products like activewear] would also see delays and price increases.”
Marc Chandler, the chief market strategist at Bannockburn Capital, had a more optimistic view of what the conflict may do to global markets.
“It is not clear what the U.S. attack really accomplished,” he said. “Oil is down more than 5%, and the August WTI contract [a benchmark for crude oil prices] is below $70 a barrel. U.S. equities are up, bond yields are lower, and the dollar has given back most of its early gains. The disruption may be a lot less than people feared.”
However, he did note that there could be many ripple effects from the conflict. Most notably, the Trump administration has been putting pressure on the Federal Reserve to lower interest rates, which it has held off doing all year. But the strikes in Iran could give the Fed another reason to keep interest rates high. Low oil prices have contributed to lessening inflation so far in 2025, but oil prices jumped significantly after Israel attacked Iran and again after the U.S. got involved, worsening inflation and motivating the Fed to keep rates high. Higher interest rates have all sorts of downstream effects in the fashion industry in areas from consumer spending to material costs to fundraising.
Lastly, Ravi de Silva, founder of de Risk Partners, said the stronger sanctions on Iran issued on June 20 could increase the likelihood of financial crimes in international business. Companies that operate in different markets around the world will need to be more careful when dealing with unvetted partners to avoid running afoul of the U.S. government’s new sanctions.
“U.S. companies should take proactive steps to assess and manage evolving risks tied to sanctions and terrorism financing,” de Silva said. “This includes strengthening due diligence on third-party vendors, reviewing supply chain exposure in high-risk regions and updating sanctions screening tools to account for fast-changing regulatory developments.”
