TEMPO.CO, Jakarta - The conflict between Israel and Iran has rapidly escalated after an unprecedented attack against Iran's nuclear facility on Friday, June 13, 2025. Not only affecting the region's stability, the conflict also affects the global economy and the world energy market.
INDIAN EXPORTS AFFECTED
The conflict between Iran and Israel is adding to the global economic uncertainty, impacting international trade, including India's exports. Exporters estimate that shipping tariffs by air and sea will bloat.
India's exports to Europe and countries like Russia are potentially affected by this situation. If the conflict persists, the movement of merchant vessels in strategic routes, such as the Strait of Hormuz connecting Iran and the United Arab Emirates (UAE), as well as the waters of the Red Sea, is expected to be disrupted.
"The war will further hurt global trade. The situation was gradually improving but now again the trade will be impacted. Our exports to Europe and countries like Russia may get hurt. Freight rates and insurance are expected to increase," said President of the Federation of Indian Export Organizations (FIEO) SC Ralhan, as quoted from the Economic Times.
RED SEA SHIPPING
Exporter and Founder of Technocraft Industries Ltd, SK Saraf, stated that the real impact of the conflict between the two countries is seen in the increased shipping and insurance costs after the lull. This is because the Red Sea route will slowly return to normal.
Furthermore, Saraf also warned that if the war between Iran and Israel lasts more than a week, global trade will face major difficulties. "Iran and Israel too are our big trading partners," he said.
Currently, cargo ships are slowly reverting to using the Red Sea route, which previously was able to cut delivery times to the United States and Europe from India and other Asian regions by 15-20 days. However, if ships start avoiding this route due to the conflict, shipping costs are expected to soar and must be borne by the traders.
The increased hostilities in the region, briefly halted cargo traffic through the Red Sea due to the Houthi rebel attacks on commercial ships. After the United States intervened with attacks on the rebel group, the attacks on the ships ceased.
"Everything depends on whether the conflict remains localized or expands to include other countries. Its impact will be first felt in global crude oil prices," said Director General of FIEO Ajay Sahai.
In addition to the Red Sea route, the Strait of Hormuz has become another crucial point, adding pressure on the world energy trade.
Located between Oman and Iran, this strait connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. About 21 percent of the world's liquid oil consumption passes through this route.
Countries like China, India, Japan, and South Korea are the main destinations for crude oil passing through the Strait of Hormuz. Oman also uses this route to supply liquefied natural gas to India. Only Saudi Arabia and the UAE have alternative pipeline networks that can bypass the Strait of Hormuz.
Editor’s Choice: Middle Eastern Nations Condemn Israel's Strikes on Iran, Urge De-escalation
Click here to get the latest news updates from Tempo on Google News
US House Speaker Postpones Visit to Israel Due to Iran-Israel Tensions
1 jam lalu
The Speaker of the US House of Representatives Mike Johnson stated that his visit to Israel has been postponed 'due to the complicated situation happening in Iran and Israel'.
21 Arab, Muslim Nations Call for Israel to Halt Strikes on iran
1 jam lalu
The foreign ministers of Arab and Muslim countries condemned Israel's attack on Iranian territory.
Israel-Iran Conflict Leads to 3 Nations Withdrawing from Asian Fencing Championship in Bali
1 jam lalu
The ongoing conflict between Israel and Iran has forced Iran, Iraq, and Kuwait to withdraw from the Asian Fencing Championship 2025 in Bali.
The Israel-Iran Conflict: Why Are There More Casualties in Iran?
2 jam lalu
The Israel-Iran conflict has claimed hundreds of lives and injured thousands. This article explores the reasons behind the higher number of casualties in Iran compared to Israel.
Trump Abruptly Leaves G7 Summit Early Amid Escalating Israel-Iran Conflict
2 jam lalu
Trump's warning of an escalating Israeli attack on Iran came after a day of meetings with world leaders.
Israel's Largest Refinery Shut Down After Damage from Iranian Missiles
3 jam lalu
Bazan, Israel's largest oil refinery, announced the complete closure of its facilities at the Haifa Port due to damages caused by an attack from Iran.
France Shuts Down Israeli Weapon Stands at Paris Air Show
4 jam lalu
France closed four major Israeli stands at the Paris Air Show for displaying offensive weapons on Monday.
Foreign Affairs Ministry: Indonesians in Iran and Israel Remain Safe Despite Escalating Conflict
4 jam lalu
The Indonesian Ministry of Foreign Affairs (Kemlu) ensures the safety of Indonesian citizens in Iran and Israel following the escalation of conflict and missile exchanges between the two countries.
Rising Oil Prices from Iran-Israel Conflict Highlight Indonesia's Energy Vulnerability, Warns Aspebindo
5 jam lalu
Aspebindo evaluates the increase in oil prices due to the Iran-Israel conflict as a warning for the fragility of national energy resilience.
Israel Strikes Iran's State TV Headquarters, Interrupts Live Broadcast in Tehran
15 jam lalu
Government television building of Islamic Republic of Iran Broadcasting (IRIB) was attacked by Israel on Monday night.
