Summary of Key Findings
This is a report prepared by the Finnish Research Centre for Energy and Clean Air on the effects of the US-Israeli-Iranian war that broke out at the end of February 2026. Due to the disruption of the Strait of Hormuz, a vital global energy transportation route, countries that rely on maritime imports of oil and natural gas incurred additional costs amounting to $330 billion in the first six months of the war, exceeding the market expectations before the conflict. This figure is a very conservative estimate; it does not take into account the additional costs of detours, war-risk insurance premiums, or the increased prices of coal and pipeline natural gas, meaning the actual losses could be even higher. The most counterintuitive conclusion of the report is that the costs of the conflict have not been evenly distributed; rather, poorer countries have borne a heavier burden, while the resource-rich countries that sell energy have profited significantly from it.
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Detailed and Easy-to-Understand Explanation
1. The $330 billion in additional losses is not an arbitrary figure; it is a conservative estimate
Many people may wonder how the "additional expenses" were calculated. The report uses a fair methodology: it does not use the average oil prices from the years before the war as a benchmark but instead relies on the market futures prices from 12 days before the official outbreak of the conflict. These prices represent the general predictions made by all energy traders about future oil and gas prices for the next six months, and the actual costs incurred that exceeded these predictions are considered the additional losses due to the war. Moreover, this figure is deliberately conservative; it does not include the extra costs of detours for oil tankers, the high insurance premiums associated with the war, or the increased prices of other energy sources such as pipeline natural gas and coal. If all these factors were included, the total loss would likely be much higher. The $330 billion already accounts for the situation where countries reduced their imports due to the high prices. Within this total, crude oil accounted for half of the additional costs ($164.1 billion), diesel for $73.8 billion, gasoline for $35.7 billion, liquefied natural gas from Eurasia for $38 billion, and aviation kerosene for $20 billion.
2. Price increases were not uniform; there were significant differences among different energy sources and regions
It might seem logical that all energy prices would rise during a war, but in reality, diesel prices were the most affected:
- Crude oil prices only increased by 35% compared to pre-war expectations and had already begun to decline by August, remaining 22% higher than expected.
- Diesel prices, however, rose by 59% and continued to rise by August, exceeding expectations by 65% with no sign of a slowdown.
- Liquefied natural gas prices in Asia increased by 75%, and in Europe by 60%. By August, prices in Asia had almost doubled compared to pre-war expectations.
- The most unusual situation was in the United States, where natural gas prices not only did not rise but actually decreased by 9% compared to pre-war expectations. This is because the Strait of Hormuz is not a major route for US domestic natural gas imports. With an oversupply, prices fell. Even the cost of liquefied gas for household use in India increased by 29%, resulting in a nearly 13% increase in import costs. In the first month of the war, India's liquefied gas imports were halved, leaving many low-income families unable to afford it and forced to resort to burning wood for cooking.
3. The absolute losses were mainly borne by East Asia and the EU; poorer countries faced a burden twice that of richer countries
In terms of the total amount spent, the EU incurred the highest additional costs ($78 billion), followed by China ($35 billion) and India ($22 billion). The combined costs of the EU and East Asia exceeded the total spent by all other energy-importing countries. However, when considering the proportion of these additional costs relative to GDP, the distribution of the burden was reversed: China's $35 billion in additional costs accounted for only 0.17% of its GDP, which was barely noticeable. In contrast, Egypt's $5.2 billion in additional costs accounted for 1.33% of its GDP, equivalent to the entire country working for five days in vain to cover the increased energy costs. Overall, low-income countries had to allocate 1% of their GDP to cover the extra energy costs, while high-income countries only needed to allocate 0.45% of their GDP. The relative burden on the poorest countries was 1.7 to 2.3 times that of the richest countries, meaning the poorer countries bore a much heavier burden for a war happening thousands of miles away in the Middle East.
4. The resource-rich countries reaped all the additional profits
The countries that sell energy benefited significantly from the conflict: Middle Eastern oil exporters earned an additional $61.2 billion, North American countries $47 billion, and Russia $35.9 billion. Russia's energy revenues had just reached a historical low, but the conflict helped them recover, effectively funding their military expenses, with no immediate incentive to stop the conflict.
5. The costs of the war ultimately affect everyone's daily life
The $330 billion in additional costs are not just a figure at the national level; they have a real impact on individuals. Diesel is a crucial fuel for freight transportation and agricultural product delivery, and its price increase of nearly 60% means that the costs of groceries, deliveries, and parcels will rise. With the upcoming winter in the Northern Hemisphere, the doubling of natural gas prices in Eurasia will affect heating costs and household gas usage. The additional $20 billion in aviation kerosene costs is likely to lead to further increases in airfare. For poor countries in Africa and South Asia, which already struggle with food scarcity, the inability to afford liquefied gas will slow down economic development and affect global supply chains and trade. No one can remain unaffected by these consequences of a war happening thousands of miles away.