A widening conflict in the Middle East is driving oil prices sharply higher across the world, disrupting airline operations, straining household budgets, and prompting warnings from the world's leading economic institutions that relief may still be weeks away.

At the heart of the crisis is the Strait of Hormuz, the narrow waterway between Iran and Oman through which roughly a fifth of the world's oil supply normally flows. Since the conflict escalated on February 28, Iran has largely blocked the strait to foreign shipping, causing oil prices to surge. US Energy Secretary Chris Wright said on Monday that prices are likely to keep rising until "meaningful" ship traffic resumes through the strait — an outcome he estimated could take "a few more weeks." US President Donald Trump acknowledged over the weekend that fuel costs could remain elevated until November's midterm elections, a rare admission of the domestic political consequences of the US decision to strike Iran six weeks ago. Weekend ceasefire talks collapsed, and the US military has since extended a naval blockade of the strait into the Gulf of Oman and the Arabian Sea.

The economic ripples are being felt across the globe. In the Philippines — a nation of over 110 million people that depends heavily on Middle Eastern oil imports — the government has declared a state of national energy emergency as fuel prices hit record highs. President Ferdinand Marcos Jr. announced a partial price rollback on diesel, gasoline, and kerosene starting April 14, but acknowledged it would not fully ease the burden on consumers. Separately, a surge in demand for solar energy installations has overwhelmed the local industry, with suppliers struggling to keep pace. More than two million Filipino workers based in the Middle East face additional uncertainty, with over 3,000 already repatriated amid the fighting.

Airlines are also absorbing severe pressure. Australia's Qantas said its jet fuel bill for the second half of its 2026 financial year is now expected to reach between AU$3.1 billion and AU$3.3 billion — up sharply from an earlier forecast of AU$2.2 billion. The airline has responded by raising fares, cutting domestic capacity by around 5%, and redirecting flights toward high-demand European routes that bypass the Gulf. Gulf carriers including Emirates, Etihad, and Qatar Airways have scaled back services due to the conflict, pushing passengers toward alternative Asian transit routes and benefiting carriers like Qantas, even as their costs rise. Qantas shares still fell more than 3% following the announcement.

The International Monetary Fund, World Bank, and International Energy Agency issued a rare joint statement warning that fuel and fertiliser prices may remain elevated for a "prolonged period," with knock-on risks for food security and employment worldwide. The statement, released following a coordination meeting in Washington, underscored how interconnected energy, food, and financial systems are when a conflict disrupts a chokepoint as critical as the Strait of Hormuz. With diplomatic channels stalled and the blockade expanding, policymakers from Manila to Canberra are bracing for further turbulence.