Companies producing items such as plush toys, footwear, apparel and household goods say the effects of tighter oil markets are already filtering through supply chains, with suppliers raising prices for key inputs derived from petroleum.

Executives report early signs of cost inflation that could eventually be passed on to consumers if disruptions persist.Aleni Brands, a Florida-based manufacturer of soft toys made from polyester and acrylic fibers, said its Chinese suppliers increased material costs by 10% to 15% within weeks of the conflict’s escalation.

Chief Executive Ricardo Venegas said the company is absorbing higher costs for now but may raise prices in 2027 if conditions persist.Petrochemicals derived from oil and natural gas are used in more than 6,000 consumer products, according to the US Department of Energy, including items such as lipstick, pajamas, detergents, synthetic fabrics and medical supplies.

While the majority of crude oil is used as fuel, a significant portion is refined into chemical compounds that underpin modern manufacturing.Industry experts say crude oil, composed primarily of hydrocarbons, is processed into core petrochemicals such as ethylene, propylene and benzene, which form the basis of plastics, nylon and polyester.

These materials are widely used across sectors ranging from textiles to electronics and healthcare.Consultants note that material costs represent a substantial share of manufacturing expenses.

Andrew Walberer, a partner at Kearney, said raw materials can account for up to 30% of production costs for products such as garments, amplifying the impact of commodity price swings.

Trade groups warn that sustained oil prices above $90 per barrel could accelerate inflationary pressures across supply chains. The Footwear Distributors and Retailers of America estimates that petrochemical-based materials make up roughly 70% of synthetic footwear, with oil price fluctuations directly influencing around 30% of those costs.

The group projects retail shoe prices could rise by 1.5% to 3% in the coming months.Manufacturers are also adjusting procurement strategies. Rinseroo, which produces portable washing attachments using petroleum-based components such as polyvinyl chloride, said it increased its order volumes from China after being warned of a potential 30% cost increase.

Founder Lisa Lane said the company is exploring cost-cutting measures while delaying further price hikes after earlier increases linked to tariffs.In the healthcare sector, Gentell said it plans to raise prices by about 15% as costs for petrochemical-based adhesives and energy rise.

Chief Executive David Navazio estimated overall company expenses have increased by roughly 20%.Analysts say the broader economic impact of the conflict is already visible in higher fuel prices, which are feeding into transportation and logistics costs.

This is pushing up prices for goods moved by diesel-powered freight networks, as well as air travel costs due to rising jet fuel prices.

With supply disruptions now extending into their second month, industry participants say prolonged instability could lead to sustained cost pressures across global manufacturing, particularly for products reliant on synthetic materials and plastic-based components.

Iran’s Khatam al-Anbiya central military command said the vessel was en route from China when it came under attack, warning that Iranian forces would respond. A spokesperson described the incident as “armed piracy” and said retaliation would follow.U.S. President Donald Trump said earlier that a U.S.

Navy destroyer intercepted the ship, identified as the MV Touska, after it failed to comply with repeated warnings while attempting to breach a U.S.-imposed maritime blockade on Iranian ports.Trump said the vessel was disabled after the USS Spruance fired on its engine room and that U.S. Marines had taken control of the ship.

He added that the Touska was subject to U.S. Treasury sanctions due to a history of alleged illegal activity.The U.S. Central Command said the destroyer issued warnings over a six-hour period before using force to stop the vessel, marking the first such interception since the blockade began last week.

It added that U.S. forces have turned back at least 25 commercial vessels attempting to navigate the restricted waters.The confrontation comes amid heightened instability in the Strait of Hormuz, a critical route for global oil and gas shipments, which has remained largely closed since the outbreak of the U.S.-Israel conflict with Iran seven weeks ago.

Iran briefly reopened the strait on Friday following a ceasefire in Lebanon but shut it again within 24 hours, citing continued U.S. naval restrictions. The uncertainty has disrupted maritime traffic, with vessel tracking data showing tankers reversing course in recent days.Energy analysts warned that the renewed tensions could drive volatility in oil markets after a brief easing late last week.

Amrita Sen, founder of Energy Aspects, said developments over the weekend underscored the fragility of the situation and the risk of further escalation.

The incident adds pressure on diplomatic efforts to stabilize the region, with markets and governments closely monitoring the standoff for signs of either de-escalation or further conflict.

Wang told Tajani that China is prepared to work with Italy to unlock further “potential” in bilateral ties, signalling interest in deepening collaboration despite broader shifts in global trade dynamics.

China is open to expanding cooperation in areas including e-commerce, agriculture and food, healthcare and the development of industrial parks, the commerce ministry said, outlining sectors seen as key to future engagement.

The meeting reflects ongoing efforts by Beijing to sustain and diversify trade relationships with European partners, as global supply chains and geopolitical alignments continue to evolve.

Speaking at Tsinghua University, Sanchez said trade flows between China and the EU were “imbalanced” and called on Chinese authorities to open their markets to address a widening deficit. “We need China to open up so that Europe does not have to close itself off,” he said, adding that the deficit grew by 18 percent last year and posed risks over the medium to long term.

Sanchez’s visit, his fourth to China in four years, comes as Madrid seeks to position itself as a bridge between Beijing and the 27-member EU amid signs of strain in transatlantic relations. Recent tariff measures and policy shifts under Donald Trump have prompted several Western governments to pursue closer economic engagement with China.

Spain recorded a trade deficit of 42.3 billion euros ($49.1 billion) with China last year, with Sanchez noting that the shortfall accounts for 74 percent of the country’s overall trade deficit. Spain’s population of roughly 50 million contrasts with China’s more than 1.4 billion, underscoring the structural imbalance in bilateral trade.

The Spanish government is seeking improved access for agricultural and industrial exports and exploring opportunities for joint ventures in the technology sector. Officials also aim to attract Chinese investment into Spain and secure access to critical raw materials.

During the visit, Sanchez is scheduled to tour facilities linked to Xiaomi and the Chinese Academy of Sciences, before holding talks with senior Chinese leaders including President Xi Jinping and Premier Li Qiang.

The trip follows a period of diplomatic friction with Washington after Trump threatened to reduce trade ties with Spain, citing Madrid’s refusal to allow use of its military bases for U.S. strikes against Iran, a key Chinese economic partner.

Spain’s exports to China rose 6.8 percent in 2025, according to government data, reflecting strengthened bilateral engagement. During Sanchez’s previous visit in April 2025, Beijing agreed to expand market access for Spanish products including pork and cherries.

Chinese foreign ministry spokeswoman Mao Ning described Spain as “an important partner of China within the EU,” signaling Beijing’s willingness to deepen bilateral cooperation.

Sanchez’s trip highlights Spain’s effort to chart an independent foreign policy within Europe, positioning China as a strategic partner rather than a geopolitical rival, in contrast with Washington’s stance.

Trump has previously criticized Madrid over its refusal to grant landing rights for U.S. forces during the Iran conflict and for what he described as insufficient defence spending among NATO allies.

The Spanish leader’s approach has drawn mixed reactions domestically, with supporters backing his economic engagement strategy while businesses and opposition figures warn that deteriorating relations with the United States could carry economic risks.

A government source said Sanchez’s meeting with Xi Jinping on Tuesday would focus on geopolitical issues, reflecting Madrid’s view of China as a stabilizing global actor. However, trade representatives cautioned that such positioning could exacerbate existing strains, particularly as U.S. tariffs on European Union imports continue to weigh on Spanish exports.

“The United States is the leading foreign investor in Spain,” said Ramon Gascon Alonso of Spain’s Exporters’ and Investors’ Club, pointing to the importance of bilateral trade in key sectors of the economy.

Opposition figures have also criticized Sanchez’s stance, warning that public disagreements with Washington could undermine NATO cohesion and jeopardize the U.S. military presence in Spain.

China’s ambassador to Spain, Yao Jing, said stable bilateral relations had contributed to increased Chinese investment, describing Spain as pragmatic in its approach to economic cooperation and market access.

Official data showed Chinese firms invested 643 million euros in Spain in 2025, up from 149 million a year earlier, bringing total investment between 2010 and 2025 to 9.7 billion euros, largely concentrated in extractive industries and the energy sector.

During the three-day visit, Sanchez is scheduled to attend a formal banquet hosted by Xi, meet Premier Li Qiang and senior legislator Zhao Leji, and engage with business and academic leaders, including a visit to Xiaomi and a speech at Tsinghua University.

Spain is seeking to narrow a trade deficit with China that has more than doubled over four years to nearly $50 billion in 2025, with efforts focused on boosting agricultural and manufacturing exports.

Officials are also aiming to finalize a regionalization agreement to protect poultry exports affected by bird flu, following a similar arrangement that supported the pork industry during a previous African swine fever outbreak.

In a post on social media, Trump said U.S. naval forces would block “any and all ships” attempting to enter or leave the waterway, which carries roughly 20% of global oil supplies and is central to international energy markets.

He added that the Navy had been instructed to “seek and interdict every vessel in international waters” that had paid a toll to Iran, describing such payments as illegal and warning that affected ships would not be granted safe passage.

The announcement came shortly after U.S. officials ended negotiations with Iran in Pakistan without reaching an agreement, prompting Washington to escalate efforts to curtail Tehran’s economic leverage derived from control over the strategic shipping lane.

Trump said Iran’s nuclear ambitions remained a key obstacle to resolving the conflict and signaled readiness for further military action. “At an appropriate moment, we are fully ‘locked and loaded,’” he wrote, adding that U.S. forces would “finish” the remaining aspects of the war.

The Strait of Hormuz is a critical chokepoint for global energy supplies, and any disruption to shipping through the narrow passage has the potential to impact oil prices and international trade flows.

No immediate response from Iranian authorities was reported.

In an interview, Banga said the World Bank expects global growth to decline by 0.3 to 0.4 percentage points under a baseline scenario assuming an early end to the conflict, and by as much as 1 percentage point if the war continues.

Inflation could rise by 200 to 300 basis points, with further increases of up to 0.9 percentage point in a prolonged conflict scenario.The bank now projects growth in emerging markets and developing economies at 3.65 percent in 2026, down from a previous estimate of 4 percent in October.

In a more severe scenario, growth could fall to as low as 2.6 percent. Inflation in these economies is forecast to reach 4.9 percent, compared to an earlier estimate of 3 percent, and could climb as high as 6.7 percent if disruptions persist.

The conflict has already driven oil prices up by about 50 percent while disrupting supplies of key commodities including oil, natural gas, fertilizers and helium, alongside impacts on tourism and air travel. Continued instability around the Strait of Hormuz remains a major risk factor, given its role in global energy flows.

Banga said the economic outlook depends heavily on whether ongoing negotiations lead to a lasting peace and the reopening of critical trade routes. Failure to stabilize the situation could result in longer-term damage to energy infrastructure and sustained pressure on global markets.

The World Bank has begun discussions with vulnerable countries, including small island states with limited energy resources, on accessing emergency funding through its crisis response mechanisms. These facilities allow governments to draw on pre-approved funds to manage immediate shocks without requiring new approvals.

At the same time, Banga cautioned governments against introducing unsustainable energy subsidies, warning such measures could worsen fiscal pressures in countries already burdened by high debt and elevated borrowing costs.

The crisis has intensified calls for energy diversification and greater self-sufficiency. Banga pointed to increased investments in refining capacity in countries such as Nigeria as an example of improving energy resilience, while noting ongoing World Bank support for expanding energy production in nations including Mozambique.

He added that scaling up nuclear, hydroelectric, geothermal, wind and solar energy would be critical to reducing reliance on traditional fuels and mitigating future shocks to global energy systems.

Speaking to reporters, Trump acknowledged the difficulty of the task and provided no operational details but indicated that other countries were prepared to assist. “It won’t be easy, we will have that open fairly soon,” he said, adding that multiple nations reliant on the waterway were offering support.

The Strait of Hormuz, which handles roughly 20 percent of global oil and liquefied natural gas shipments, has seen traffic severely curtailed since Tehran effectively blocked passage following the outbreak of hostilities. The disruption has triggered sharp volatility in global energy markets and raised concerns over supply security.

The conflict escalated after U.S. and Israeli forces launched strikes on Iran on February 28, prompting retaliatory attacks by Tehran on Israel and U.S. military installations in Gulf states. The broader regional confrontation has resulted in significant casualties, mass displacement and sustained pressure on oil prices.Trump has also pressed allies to contribute more actively to securing the waterway.

Following talks with the U.S. president, Mark Rutte urged European governments to provide concrete commitments within days, according to Reuters reporting.A fragile ceasefire announced earlier this week between Washington and Tehran has yet to restore normal shipping flows through the strait.

Separately, the United Kingdom is set to convene another meeting next week involving countries seeking to reestablish safe maritime transit through the strait. The discussions are expected to include senior officials and focus on coordinated diplomatic, economic and potential security measures to ensure passage for commercial vessels.

The meeting follows earlier consultations involving dozens of countries, including foreign ministers and military planners, as governments weigh options ranging from sanctions on Iran to maritime security operations once conditions permit.

British Prime Minister Keir Starmer has said a credible plan is needed to reopen the route and stabilize global trade flows.

“At this point, we take a cautious approach, and we are not making any changes to specific services,” the Danish container group said in a statement to Reuters.

The conflict, which escalated following U.S.-Israeli strikes on Iran in February and subsequent Iranian retaliation, led to the closure of the Strait of Hormuz and brought Gulf shipping activity close to a standstill, disrupting global supply chains.

Maersk, one of the world’s largest container shipping companies, had suspended cargo bookings to several Gulf ports last month and introduced emergency bunker fuel surcharges globally to offset rising fuel costs.

“The ceasefire may create transit opportunities, but it does not yet provide full maritime certainty and we need to understand all potential conditions attached,” the company said.It added that any decision to resume transit through the strait would depend on ongoing risk assessments, security conditions and guidance from relevant authorities and partners.

In response to disruptions, Maersk has implemented alternative logistics routes, including a “land-bridge” system using ports in Jeddah in Saudi Arabia, Salalah and Sohar in Oman, and Khor Fakkan in the United Arab Emirates, allowing cargo to be transported by land into Gulf destinations.

The company said it would continue to monitor developments closely and update operations as greater clarity emerges in the coming days.

Willie Walsh, director general of the International Air Transport Association, told reporters in Singapore that while crude prices had fallen below $100 per barrel following a U.S.-Iran ceasefire announcement, jet fuel costs were likely to remain elevated due to constraints on refining output.

“If it were to reopen and remain open, I think it will still take a period of months to get back to where supply needs to be given the disruption to the refining capacity in the Middle East,” Walsh said, adding that the region is critical to global supply of refined products beyond aviation fuel.

The Strait of Hormuz, which carries about a fifth of the world’s oil trade, has been heavily disrupted during the recent conflict, squeezing fuel availability and driving up costs across the aviation sector.

Airlines in Asia have responded by cutting flights, carrying additional fuel from origin airports and adding refueling stops, measures that have increased operational costs for carriers already dealing with a sharp rise in jet fuel prices.

The impact has been most acute in import-dependent markets such as Vietnam, Myanmar and Pakistan, where supply constraints have tightened further after China and Thailand halted jet fuel exports and South Korea capped shipments at previous levels.

Walsh said a resumption of crude flows could encourage exporters such as China and South Korea to restart shipments of refined products, easing pressure on the market over time.

However, he noted that higher refinery margins, known as crack spreads, would be needed to incentivize increased jet fuel production.

“There is capacity available once we get the crude oil flowing, but it’ll take a little bit of time,” Walsh said.