The last two weeks have been a rollercoaster. We’ve seen the headlines about the Middle East, the conflict, the Strait of Hormuz, and oil prices. Some of you may have brushed it off as “geopolitical noise that doesn’t affect my business.” But more likely, you’ve been wondering if or how it impacts your business.
Either way, this is worth fifteen minutes of your attention.
To be clear, I’m diving into politics here. What I want to focus on is the economic impact of the actual situation, and how it may evolve for companies like yours.
What’s Actually Happening
In early March, the US and Israel launched military operations targeting Iran. The immediate consequence: major disruption to the Strait of Hormuz, a narrow waterway through which roughly one-fifth of daily global oil and LNG supply flows. 1
I’m sure you have seen the direct consequences: disruptions to trade and economic activity, surges in energy prices, and financial market volatility. This turbulence did not happen in a vacuum. It comes on top of tariff uncertainty and post-pandemic debt. The IMF described the situation as “highly fluid” and reserved its full assessment for April. 2 If anything, that tells us that uncertainty is high, with a range of possible outcomes.
Most analysts have a base case where disruption is relatively short-lived, and energy prices eventually retreat. But the same analysts flag that unintended consequences could keep prices elevated for months, with meaningful implications for global growth and inflation. 3 4
Scenario Thinking
This uncertainty means that at this point, your 2026 plans are halfway to irrelevance. Halfway, because they are still your anchor point.
In a stable situation, where you have a lot of control, it is relatively straightforward to execute on your plans.
In the current situation, however, a lot of things are out of your control. This means that you need to be more flexible and anticipate the landscape to change.
Most analysts are working with three scenarios. A short disruption (weeks, not months) where energy prices spike and retreat and 2026 plays out roughly as planned with some turbulence. A sustained disruption (three to six months) where inflation feeds through, consumer sentiment softens, and growth forecasts get revised down. And an extended scenario where the conflict widens, and we’re looking at something economists are already comparing to the 1970s energy crisis, with energy and inflation up for the remainder of the year.
The base case is the first one. Most people are planning only for that. The question worth sitting with is: what does your business actually look like in scenario two or three?
One obvious factor I should not ignore here: AI.
I personally view it as an amazing opportunity and a massive threat for most of us. It is not directly related to the macro turbulence I described above, but it does add another layer of uncertainty.
What This Means for the Economy and Your Customers
The mechanism is straightforward. Sustained energy prices drive inflation across the board: fuel, food, shipping, everything that moves. If prices stay elevated for several months, Goldman Sachs estimates US consumer price inflation could rise from 2.4% to 3% by year-end.1 Combined with US import tariffs already at 10% globally 5, consumers are paying more for pretty much everything: groceries, fuel, rent, travel.
When people (and businesses!) feel financially squeezed, they don’t stop spending entirely, but they do reprioritise. The first things to go are the discretionary ones. This may be luxury goods, a coaching programme, premium subscriptions, or the agency retainer they’ve been meaning to review.
The things they can’t cut, such as insurance, key software and key vendors/suppliers, they keep.
Consumer sentiment doesn’t have to collapse for your revenue to soften. It just has to shift.
The same pressure hits B2B. When your clients feel uncertainty or expect their numbers to take a hit, they slow down decisions, delay projects, and scrutinise expenses they previously left alone.
For more corporate clients, interest rate cuts that most had pencilled into their 2026 plans are now unlikely to materialise (worse, I’m expecting rate increases instead), which means the cost of capital stays higher, growth plans get more conservative, and the businesses they buy from feel it.
“Things are good right now, I’ll deal with a slowdown if it comes.”
I’ve heard this one time too many. The problem is that by the time a slowdown shows up in your numbers, the window to prepare has already closed.
What to Do About It (Before You Need To)
Never let a good crisis go to waste. This is the moment to do the financial housekeeping you’ve been deferring.
The cost of doing it now is low, and the cost of not doing it could be high.
First: map your cost exposure. Shipping, logistics, any vendor whose overhead moves with fuel or freight. Know the exact number before the invoices change. This is a one-hour exercise that most businesses haven’t done.
Second: audit where your revenue actually sits. Draw a line down the middle of your revenue: on one side, the income that’s genuinely discretionary from your customer’s perspective. Are you selling a nice-to-have, easy-to-justify-cutting spend? Or are you closer to essential? Be honest about where you are on that spectrum? Your different offerings may be on different parts of the spectrum.
Third: build a tiered cut list (now, not later). Three tiers.
What should you trim early if things soften a little?
What can you cut if things get meaningfully worse?
What is the plan if it really hits the fan?
Most businesses make these decisions reactively, under pressure, without the right data. The ones that come out of downturns well made them in advance, calmly, when there was still room to think. Having the list doesn’t mean executing it. It means you’re not scrambling when the time comes. In the best-case scenario, you just wasted a few hours. In the worst case scenario, this prevents you from panicking if everything goes south.
Using AI
The three actions above are faster to execute than they used to be. AI can help you pull together a cost exposure map, draft revenue scenarios, or sketch a cut list in an afternoon rather than a week. For brainstorming and first-draft thinking, it’s genuinely useful.
But there’s a trap here that we’re seeing more often.
AI is good at structure and speed. It’s not good at knowing that your biggest retainer client has been quietly unhappy for two months, or that your March numbers look fine because of a timing quirk that won’t repeat. It doesn’t know what it doesn’t know, and in a volatile environment, that gap is exactly where the risk lives.
Use AI to accelerate the work. Rely on human judgment to interpret it and make decisions. This is exactly where we can help.
If you want to understand where you actually stand (which costs are at risk, how your margins hold in a softer demand environment, what your cash position should look like) that’s exactly the kind of conversation our Game Plan call is built for. Hit reply if that’s useful, or book directly here.
Sources:
CNN Business — Surging energy prices and threats to shipping, 5 March 2026
IMF — Statement on the Middle East, 3 March 2026
Allianz Research — Conflict in the Middle East: Implications for markets and macro, 3 March 2026
ICG — Middle East Conflict: Potential Macro Impact, March 2026
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