The war is killing the poor
The war clouds have again set over and the world is once again witnessing a situation that will leave a much heavier burden on the common people across the globe.
From petroleum products to groceries, from medicine to all other essentials people have to cough up more and this is happening since the day war between the US led allies and Iran started. Though a brief halt in the hostilities meant some relief, but now the situation is the same as was reported in March this year.
On Monday as the US-Iran conflict again made headlines, the Oil prices jumped again. Brent crude climbed 3.6% to USD 78.76/barrel and US crude rose 3.5% to USD 73.97/barrel.
After a brief lull when an interim agreement allowed tankers to move again through the Strait of Hormuz, the US launched strikes on Iran into Monday morning. Iran retaliated across the Middle East. Markets reacted instantly. Asian shares were mostly lower, with Tokyo’s Nikkei down 1.9%, Seoul’s Kospi down 9%, and Shanghai off 2.1%. US futures also slipped. For traders, it’s a chart. For the common man, it’s the next grocery bill and other essentials.
Crude had slipped back to pre-war levels once shipping resumed through Hormuz. That relief is gone. Every USD 10 rise in crude typically adds Rs 7-9 per litre to petrol in countries like India that import 85% of their oil. That means commuting gets costlier. Auto drivers, delivery riders, and office workers feel it first. Food gets costlier. Vegetables, milk, and grains travel by diesel trucks. Freight costs go up, and shops pass it on. Even the electricity gets costlier as many power plants still run on imported fuel and LNG linked to oil.
High oil means high inflation. And when inflation rises, central banks including the US Federal Reserve are forced to keep interest rates higher for longer. Higher rates mean EMIs go up on home loans and car loans. Jobs get riskier as companies slow hiring to cut costs. Savings lose value because prices rise faster than salary hikes. The common man doesn’t track Fed policy. He just knows his monthly budget doesn’t stretch as far.
Notably, one in 5 barrels of oil passes through Hormuz. When a container ship is set ablaze and a crew member goes missing, insurance costs spike, routes get longer, and every country that imports oil pays a risk premium.
India, China, Japan, and South Korea are the biggest buyers. They don’t fight the war, but they pay for it. The war has been started by the US led allies and is fought by governments. But the bill is sent to kitchens.
A mother in a remote hilly area of Jammu and Kashmir will be budgeting for LPG. A student in Seoul watching chip stocks crash. A truck driver in Texas paying more to fill diesel, these are the situations that will become more common and fiddle with the common man’s budgets plans.
The only question that haunts a common man across the globe is that what the world leaders are doing. If US led allies are hitting Iran, the tremors are being felt globally. The poor are paying the price and what makes the rest of the world leaders sit silent and watch the situation escalate and turn for the worse.
Until there is de-escalation, the people will face volatility. Oil will swing on every headline. And the common man will keep adjusting — taking the bus instead of a cab, cutting one vegetable from the menu, delaying that new phone. Geopolitics feels distant until it shows up in your wallet. Right now, it has.
