Yesterday something small happened that made this whole situation feel very real to me.
I went grocery shopping here in Dubai like I usually do. Nothing special, just buying fruits and vegetables. But when I looked at the price of bananas, I was honestly surprised. Normally a 1kg costs around 5 AED. Yesterday the 1kg banana was around 15 or even 16 AED. Almost three times the price overnight.
At first I thought maybe it was just that store. But while walking through the supermarket I started thinking about what has been happening in the region over the last few days. The conflict between Iran, Israel and the United States has been all over the news. Missiles, military movements, rising tensions. It suddenly made sense how quickly global events can show up in everyday life.
When fuel prices rise, transport becomes more expensive. When shipping becomes uncertain, supply chains slow down. And when supply chains slow down, prices increase. All of that eventually shows up in places you don’t expect, like the fruit section of a supermarket.
This is how global conflicts quietly enter everyday life. What starts as missiles and political tension can end up affecting the price of something as simple as fruit at your local grocery store.
Right now the whole world is watching the situation between Iran, Israel and the United States. But while most people focus on the political and military side, investors are watching something else. They are watching oil, gold and financial markets.
Whenever there is tension in the Middle East, the first market that reacts is oil.
Oil surged 35% this week, recording the biggest rise in futures market history dating back to 1983. Source: CNBC
This region produces a large part of the world’s energy. Countries like Saudi Arabia, Iran, Iraq and the UAE are important players in global oil supply. Iran itself is a major producer. Even when sanctions limit its exports, the country still affects the global oil market because of where it is located.
One of the most important oil routes in the world is the Strait of Hormuz. A huge amount of global oil passes through that narrow passage every day. If traders believe that shipping in that area could be disrupted, oil prices react immediately. Even a small risk can push prices higher.
Brent crude oil futures surged 16% to above $100 per barrel on Monday, after earlier spiking as much as 29% amid production cuts by major Middle Eastern producers following disruptions in the Strait of Hormuz. The earlier surge marked the largest one-day gain since April 2020 and pushed prices to their highest level since June 2022, building on last week’s 27% rally. Kuwait has started scaling back output at its oil fields and refineries, while the UAE said it is managing offshore production to deal with storage constraints, with onshore operations continuing as normal. In Iraq, production from its three primary southern oilfields has fallen by about 70%, dropping to 1.3 million barrels per day from 4.3 million bpd before the conflict, according to industry sources. These developments follow LNG production cuts in Qatar last week, which have further tightened global energy supplies. Meanwhile, Iran has appointed the son of the late Ayatollah Ali Khamenei as its new Supreme Leader. Source: Trading Economics
Markets do not wait until supply actually stops. They move based on what might happen.
When oil prices rise, the effects spread everywhere. Airlines pay more for fuel. Shipping companies face higher costs. Factories spend more to run machines and transport goods. Eventually businesses increase prices and consumers feel the pressure.
This is one of the reasons why conflicts in the Middle East can affect the global economy so quickly.
Another market reacting strongly right now is gold.
Whenever the world becomes uncertain, investors start buying gold. For many years gold has been seen as a safe place to store wealth during unstable times. When there is fear in the market, investors move money out of risky assets like stocks and shift it into gold.
That is exactly what we are seeing now. As tensions increase, gold prices start rising because investors want protection.
Gold is not becoming more useful overnight. What is changing is confidence. When confidence drops, demand for safe assets rises.
Gold prices in Dubai increased on Friday morning after several days of volatile trading, although the metal is still below the record highs seen earlier this month amid global market uncertainty. At 9:15 am on Friday, the price of 24-karat gold in Dubai was Dh618 per gram, rising from Dh611.50 on Thursday. Meanwhile, 22-karat gold climbed to Dh572.25 per gram, up from Dh566.25 the previous day. (You can check the latest UAE gold prices along with rates in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.) The slight recovery comes after a week of significant fluctuations in global bullion markets. However, despite Friday’s increase, gold is still heading toward its first weekly decline in over a month. Source: Gulf News
Stock markets are also reacting to the situation.
Markets prefer stability. Companies grow when conditions are predictable. But wars create uncertainty. Investors start asking many questions. Will oil supply be affected? Will trade routes become risky? Will inflation rise again?
When there are too many unknowns, investors often reduce risk. They sell shares, move to safer investments, or wait until the situation becomes clearer.
This is why stock markets often fall or become more volatile during geopolitical conflicts.
Governments Spend Huge Amounts During War
Wars are extremely expensive. Military operations require equipment, fuel, logistics and personnel. Countries involved in conflicts can spend billions very quickly. Even countries that are not directly fighting may increase defense spending to prepare for possible risks.
When governments spend more, they often borrow more. That increases national debt. Over time that debt can affect economic policies and taxes.
The war involving the United States and Israel against Iran is estimated to have cost Washington about $3.7 billion during its first 100 hours, averaging nearly $900 million per day, largely due to the heavy use of munitions, according to new research. An analysis by the Washington-based think tank Center for Strategic and International Studies (CSIS) highlighted the massive financial burden of the conflict, which entered its seventh day on Friday, as the US continues striking Iran using stealth bombers and advanced weapons systems. Researchers Mark Cancian and Chris Park noted that only a small portion of the $3.7 billion spent in the first 100 hours had already been budgeted, while the vast majority—around $3.5 billion—was unplanned. Source: Aljazeera
The Middle East sits between Asia, Europe and Africa. It is one of the most important trade corridors in the world. If shipping routes become risky or insurance costs increase, companies may delay shipments or choose longer routes.
That increases transport costs and slows global trade.
Even countries far from the conflict can feel these economic effects.
Living in Dubai makes this situation feel closer. The UAE is one of the most stable economies in the region, and life continues normally. But people are aware of what is happening. Investors watch oil prices. Businesses watch shipping routes. Markets respond quickly to news.
It reminds you how connected the world economy really is.
A single headline about missiles can move billions of dollars in global markets within minutes.
Oil rises because supply might be disrupted. Gold rises because investors want safety. Stock markets become cautious because uncertainty increases. In the end, financial markets move based on confidence. When confidence is strong, investors take risks. When confidence drops, they move to safety.
Right now the world is watching the conflict for political reasons. But markets are watching it for financial reasons and as I realized while standing in that supermarket looking at banana prices, global events do not stay far away for long. Eventually they show up in everyday life.
The Real Cost of War
When people think about war, they often think about military battles.
But the financial impact is enormous. Oil price spikes, Stock market losses, Government spending increases, Global trade slows down, Investor confidence drops.All of this can cost the global economy trillions of dollars over time and that cost is not paid by governments alone. Businesses, investors and ordinary people eventually feel the impact.
Final Thought
Wars do not only change borders or politics. They change markets. Right now the Iran Israel conflict is not just a military story. It is a financial one. Oil prices are moving. Gold is rising. Stock markets are reacting. And as someone living in Dubai, it is clear how quickly global finance responds to events in this region. In today’s world, a conflict in one place can send shockwaves through the entire global economy. Money moves as fast as the news. The UAE is the safest country out there; we are not scared even 0.000001% because we know the government will do anything for their residents to make them safe, and yes, we are not scared; we are enjoying our daily life freely in the UAE.
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