What if Israel-Iran conflict stretches to 100 days? From oil to dollar to consumer prices, possible impact explained

A US military notification, quoted by foreign media reports, signals the ongoing conflict in the Middle East could drag on for 100 days or until September, far beyond US President Donald Trump's promised four-week timeline, raising alarm bells for world markets. The US Central Command has reportedly asked the Pentagon to deploy more military intelligence officers to its headquarters in Tampa, Florida, to support operations against Iran during this period.

The request signals that the Donald Trump 2.0 administration may be gearing up for a conflict that could stretch far beyond the initial four-week timeline -- as earlier suggested by the 47th American president.

Contrary to market expectations that negotiations may begin soon, reflected in mild recoveries across major equity benchmarks, many analysts have predicted the possible ramifications of a prolonged conflict on energy, USD and the global aviation space.

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And some have warned that the impact may not stay confined to the battlefield if the war stretches for another 100 days, as reportedly indicated. They argue that it could reach currency markets, energy prices and even household kitchens in different parts of the world, including India.

Critics even say Team Trump was not initially fully prepared for the wider consequences of the war.

The Iran-Israel conflict escalated into full-scale war on February 28, 2026, when Israel and the US jointly launched coordinated airstrikes against Iran, killing its Supreme Leader Ali Khamenei and triggering Tehran's attacks against several countries in the region.

The conflict followed last year's ceasefire following a 12-day war, Iranian protests over economic collapse in December, and Trump's January 2026 warnings of military action if Iran rebuilt weapons.

Now, the potential impact of a prolonged Iran-Israel war on crude oil, the US dollar and, ultimately, consumer prices. Crude oil and dollar share an inverse relationship, with a stronger greenback raising oil costs for those holding other currencies -- more than 85 per cent of globally traded crude goes to non-US buyers.

Dollar

A prolonged Middle East war typically sends investors scouting for safer assets. Typically, that strengthens the American currency, as global funds move out of riskier markets and into American assets.

A stronger dollar has direct implications for countries like India. It can weaken the rupee, making imports more expensive and, in turn, influencing the retail prices borne by the end consumer.

For India, which meets four-fifths of its crude oil requirement through imports, that exchange-rate move alone can raise economic pressure.

"In a war-driven risk-off scenario, the US dollar tends to act as a safe-haven, especially initially—capital rotates toward dollar and US Treasuries, putting pressure on the emerging market currencies like the Indian rupee. If the conflict becomes prolonged and starts to worsen US fiscal dynamics or global growth materially, the USD’s path can become two-speed: near-term strength on risk aversion, but could see moderation as growth/inflation trade-offs evolve," said Sugandha Sachdeva, Founder of SS WealthStreet, a New Delhi-based research firm.

Crude oil and gas

Iran sits near one of the world’s most critical oil routes -- the Strait of Hormuz -- through which nearly a fifth of global oil trade flows. If tensions escalate or shipping routes face disruptions for longer than earlier anticipated, global crude prices could spike and stay at elevated levels for a proportionately longer time.

Higher oil prices impact India primarily in three ways:

• A larger import bill
• Higher fuel prices
• Rising inflation

Gas markets could also tighten if the conflict disrupts Middle East supplies of liquefied natural gas.

"The ongoing tensions between Iran, Israel and the United States are already being reflected in the global energy markets, with crude oil witnessing a sharp surge due to fears of supply disruptions in the West Asia region. Crude prices have already gained close to 39-40 per cent this year, and since the conflict intensified, prices have risen by nearly 15 per cent in a matter of a week as markets factor in the geopolitical risk premium. The biggest concern for the global energy market is the Strait of Hormuz," said Sachdeva.

"For India, the risk is particularly significant as the country is the third-largest oil importer globally, and roughly 46-50 per cent of its crude imports pass through the Strait of Hormuz. If this key chokepoint remains disrupted for an extended period, it could trigger a sharp spike in crude prices and create ripple effects across global markets, including India," the analyst told Zeebiz.com.

She also pointed out that higher oil rates could eventually translate into rising inflation in India, given that crude is a key input for several industries such as petrochemicals, tyres, paints, aviation fuel and fertilisers. "Any sustained rise in oil prices would increase input costs for these sectors, which are likely to be passed on to consumers, thereby pushing inflation higher... LNG flows have also been disrupted, as around 20–25 per cent of global LNG trade passes through the Strait of Hormuz, which could further increase energy costs and impact sectors dependent on natural gas," added Sachdeva.

Consumer prices

Energy prices can ultimately have a direct impact on household expenses in India due to dynamic daily fuel pricing. If crude oil remains elevated for months, transport costs increase. That raises the cost of moving goods across the country.

Fuel prices, in turn, can influence the end-user prices of common household groceries like cooking oil, vegetables and packaged foods due to logistical costs. Besides, LPG prices can also face upward pressure if global benchmarks stay elevated.

"Overall, while the immediate impact on the Indian economy may remain manageable, a prolonged disruption in the Strait of Hormuz could push crude prices higher, weaken the rupee and trigger inflationary pressures," said Sachdeva.

Technical view

Oil prices have already broken out of a downward sloping trend channel on weekly charts, indicating the possibility of further upside if the conflict escalates, the analyst pointed out. "In case tensions intensify and shipping disruptions worsen, brent crude prices could potentially rise towards $120-125 per barrel, and in an extreme scenario even move closer to $130-135 per barrel. Key support rests at $65 a barrel for crude oil. At the same time, rising supplies from OPEC+, Venezuela and floating storage inventories may act as a moderating factor for prices," she said.