Posted on February 28, 2026 by TaxCalculator.lk Team
In the early hours of February 28, 2026, the United States and Israel launched coordinated military strikes on key Iranian military and nuclear sites, including targets in Tehran and Qom. This escalation, stemming from long-standing tensions over Iran’s nuclear program, has sent shockwaves through global markets and supply chains. As a platform dedicated to helping Sri Lankans navigate taxes and finances, we at TaxCalculator.lk recognize how such geopolitical events can influence local economies, import costs, and even tax implications through rising inflation and energy prices. In this post, we’ll explore the immediate and potential long-term economic impacts on global logistics, with a focus on air and sea transportation networks.
US Iran War: What Strikes Mean For Oil, Energy And Hormuz
The Strategic Chokepoint: Sea Transportation and the Strait of Hormuz
The Strait of Hormuz, a narrow waterway connecting the Persian Gulf to the Arabian Sea, is one of the world’s most critical chokepoints for energy trade. Approximately 20% of global oil supply and a significant portion of liquefied natural gas (LNG) exports pass through this strait daily. Iran’s threats to close the strait in retaliation for the attacks have already led to heightened risks for maritime shipping.
- Shipping Rate Surges: In the immediate aftermath, spot rates for Very Large Crude Carriers (VLCCs) from the Persian Gulf to China jumped by 28%, from around $28,000 per day to $36,000 per day. Container freight indices, such as the Shanghai Containerized Freight Index (SCFI) for Asia-Europe routes, rose by 19% due to anticipated rerouting. If the conflict escalates, rates could double, forcing ships to detour around the Cape of Good Hope, adding weeks to transit times and significantly increasing fuel costs.
- War-Risk Insurance Premiums: Insurers have hiked premiums by up to 300-400% for vessels transiting the Gulf, making routes economically challenging for smaller operators. This could lead to a tanker shortage, further inflating global freight costs.
- Oil Price Volatility: Brent crude futures have spiked above $90 per barrel, reflecting fears of supply disruptions. For import-dependent nations like Sri Lanka, this means higher fuel import bills, which could trickle down to increased transportation taxes and VAT on goods.
These disruptions echo past crises, such as Houthi attacks in the Red Sea, but with potentially greater scale given Iran’s direct involvement and proxy networks.
US Israel Iran Attack: Global Energy Market Impact
Air Transportation: Closures and Cancellations Ripple Globally
Iran’s immediate closure of its airspace following the strikes has created a “vast void” in regional air routes, affecting both passenger and cargo flights. Major airlines have diverted or canceled services to the Middle East, straining global air freight networks.
- Flight Disruptions: Carriers like Emirates, Qatar Airways, and others have rerouted flights, avoiding Iranian, Iraqi, Syrian, and parts of Jordanian and Israeli airspace. This has led to longer flight times, higher fuel consumption, and delays in cargo delivery. Gulf hubs such as Dubai and Doha, crucial for east-west traffic, are seeing operational costs rise due to extended routes.
- Cargo Impacts: Air freight, often used for high-value or time-sensitive goods, is under pressure. Belly-hold cargo on passenger flights is particularly affected, while dedicated freighters continue but at premium rates. Global supply chains for electronics, pharmaceuticals, and perishables could face delays, potentially increasing costs for Sri Lankan importers and exporters.
- Broader Economic Ties: With the US Navy potentially diverting assets to combat, commercial air routes may lack traditional security, exacerbating risks.
Overall Logistics and Global Economic Implications
The combined effects on sea and air networks are amplifying broader logistical challenges:
| Sector | Immediate Impact | Potential Long-Term Effect |
|---|---|---|
| Sea Logistics | Rerouting, higher rates, insurance spikes | Chronic supply shortages, elevated global inflation |
| Air Logistics | Airspace closures, flight cancellations | Increased costs for time-sensitive shipments, supply chain bottlenecks |
| Energy Markets | Oil prices >$90/bbl | Higher energy taxes, fiscal pressures on governments |
| Global Trade | Disruptions in 20% of oil transit | Slower GDP growth, capital flight from region |
If Iran activates proxies like the Houthis, Red Sea shipping could face renewed attacks, compounding issues. For Sri Lanka, reliant on imported fuel and goods via sea routes, this could mean higher import duties, fuel levies, and overall cost-of-living increases—factors that directly influence personal and business tax calculations.
Looking Ahead: Navigating the Uncertainty
While the full extent of the conflict remains unclear, businesses and individuals should prepare for sustained volatility. At TaxCalculator.lk, we recommend monitoring energy costs closely, as they may affect tax deductions for transportation expenses or VAT on imports. Stay informed, and use our tools to estimate how rising costs might impact your finances.
For more insights on how global events affect local taxes, subscribe to our newsletter. What are your thoughts on this development? Share in the comments below.
Leave a Reply