Internationally, global markets took a dramatic dive as tensions flared in the Middle East, causing investors everywhere to flee. Military interventions and increasing global diplomatic strife has rapidly exacerbated this volatility. As a result, fears of possible oil supply disruptions and bubbling economic stability has increased.
The renewed fighting, which started on June 15, 2025, has brought heavy military action across the country, particularly in Tigray and Amhara regions. Countries have released their own travel advisories, and international agencies are watching the unfolding situation with concern. The unrest is largely the result of a deep-seated political rivalry, which has become exacerbated as of late, raising havoc that a fate of common regional conflict may emerge.
To underscore the seriousness of the instability, markets in Europe and Asia opened sharply down on June 16. Major indices – the FTSE 100, Nikkei 225 and many others – all posted their worst days ever, as investors fled in uncertainty. Oil Price Volatility Futures analysts noted that fear of volatility in oil prices is fueling this bullish sentiment. They fear these changes may be triggered by any military escalation in the region.
In fact, oil prices surged by more than 5% within hours of the invasion starting. Traders were quick to react to worries about possible supply disruptions. OPEC’s been a hard call for emergency meetings. Specifically, they are seeking to evaluate how the war in Ukraine is affecting the situation and what that means for the future of global oil production. Economists have warned that if hostilities continue, energy prices could skyrocket even more, devastating economies across the globe.
Economic analysts cautioned that continued violence would further block trade routes essential to moving commodities from wheat to fertilizer. Freight impacts shipping companies say they’ve seen soaring freight costs and transportation delays as a result of added security measures in these areas. This disruption will likely send shockwaves through global supply chains, delaying the delivery of goods and increasing their prices.
Additionally, according to CNBC, financial analysts said that industries including travel and tourism would be hit particularly hard. Airlines are drastically reducing their flight schedules to the region. Simultaneously, the number of hotel bookings plummeted as vacationers and business travelers reconsider trips. In response, the International Air Transport Association (IATA) issued a public letter calling for caution among travelers and airlines.
Market experts are still projecting the long-term economic repercussions of this unrest and their downstream impacts on economies across the globe. And they caution that short-term responses can be unstable. With well-timed, strategic responses from governments and industry, many of these impacts can be softened in the long run. Further, dozens of countries—including the United States—are pursuing diplomatic avenues to de-escalate rising tensions and establish new norms of stability.