Pickleball paddle producer Devi Wei has a message for U.S. shoppers.

“Americans will have to pay more,” the Chinese businessman told CNBC at a Beijing trade show last week at the China International Exhibition Center.

Because of the recent swings in oil prices resulting from the Iran war and closure of the Strait of Hormuz, Wei, who founded his own exporting business, Huijin Trade, has had to hike prices on his paddles and pickleballs by as much as 20%, he said.

Wei’s goods are made with polypropylene, a plastic material derived from oil and made in the Middle East, a dominant producer in the global industry. The war in Iran has stalled shipments of oil and its products through the Strait of Hormuz, raising concerns among Chinese manufacturers at the trade fair about further disruption across the global supply chain.

“I might have to go even higher,” Wei said. “Maybe double if the Iran war doesn’t stop soon.”

Surging oil prices are filtering into prices of all kinds of products that rely on the commodity for manufacturing.

James Li, who makes scarves and said he sells a third of his inventory to the U.S., has marked up his polyester products by 5%.

“This scarf is 30% polyester,” Li told CNBC from his trade show booth. “We will definitely pass on the extra cost to our customers.”

Wang Mingming, a general manager of toy manufacturer Jinming Gifts, said he is hoarding two months’ worth of the plastic polymer PVC, but isn’t sure he can hold off charging more for his figurines.

“In our industry, these materials are almost irreplaceable,” Wang said. “If oil prices rise any further, we really won’t be able to manage.” 

Cameron Johnson, senior partner at Shanghai-based supply chain consultancy Tidalwave Solutions, said he foresees competition for oil-related products among entire sectors if the crisis at the Strait of Hormuz isn’t resolved soon. A prolonged impasse in the critical waterway also raises the possibility of product shortages.

“If this goes on into May, everyone will be in big trouble and there will be triage between industries,” Johnson said, predicting autos and the medical field would be granted higher priority. “There is no visibility when new supply will come.”

Perhaps the biggest worry among China’s manufacturers is what costlier oil will mean for discretionary spending by consumers worldwide.

More money for gas means less for Wei’s pickleballs.

“Ordinary people are getting squeezed the most from the high oil price,” he said. “Their spending power just isn’t what it used to be.

CNBC

Gold prices in Dubai eased on Thursday morning, giving shoppers a small breather after several sessions of elevated prices earlier this month.

The 24-karat rate stood at Dh619.75 per gram at around 9.30 am on Thursday, down from Dh623.75 recorded a day earlier. The 22-karat price dropped to Dh574, down from Dh577.50 on Wednesday.

The decline reflects broader global moves in bullion markets after recent US economic data shifted expectations for interest rates and strengthened the dollar.

Recent price swings

Gold prices in Dubai have moved sharply through February and early March, showing how quickly global events are feeding into local jewellery rates.

Mid-February levels were closer to Dh600 per gram for 24-karat gold, with prices around Dh596 on February 12 before gradually climbing above Dh600 in the following days. The rally gathered pace toward the end of the month when prices moved past Dh620, and by February 28, the 24-karat rate had climbed to around Dh636.

The start of March saw an even sharper surge, with prices briefly jumping above Dh640 on March 2, marking one of the highest levels seen this year. Gains proved short-lived. Rates pulled back in the following sessions, falling toward the Dh615 range by March 9 before rebounding again above Dh620 earlier this week.

GN

Luxury stocks were among the hardest hit sectors early Tuesday, with European markets heading for another day of losses as the conflict in the Middle East intensified overnight.

Shares of conglomerate LVMH, Gucci-owner Kering, and British outerwear maker Burberry were among the worst performers, with week-to-date losses approaching 10% each. The wider European blue-chip index, Stoxx 600, was down nearly 3% Tuesday, after falling 1.6% on Monday.

The Middle East has been a driver of growth in the sector, which is battling a difficult macroeconomic backdrop, and many formerly best-selling brands are struggling to resonate with consumers.

The region’s strength, however, hasn’t been enough to offset weakness elsewhere, notably in China, and industry giants like LVMH and Kering are still struggling to get sales back on a positive track.

“The Middle East has been one of the few bright spots,” Morningstar analyst Jelena Sokolova told CNBC. “You have one area which was small, but which was very, very vibrant, and it’s being affected now.”

The U.S. and Israel launched widespread attacks on Iran over the weekend that killed the country’s Supreme Leader Ayatollah Ali Khamenei. Iran responded with retaliatory strikes, and the conflict now engulfs the wider Middle East region with no clear endpoint in sight.

U.S. President Donald Trump has said the war could last for four to five weeks, but that it could go on “far longer than that.”

Shares of Richemont, the owner of Cartier, Van Cleef, and Chloé, fell heavily on Monday and Tuesday, with a relatively big exposure to the region. 

But even with Middle East revenue exposure on average in the mid- to-high single digits for luxury brands, repercussions could spread if a conflict lasts for weeks or even months.

“If people don’t go back to normal, and we have more issues when it comes to sourcing oil and gas from the Gulf, then the probability of a recession globally could be increasing, and that would definitely dampen discretionary sectors like luxury,” Bernstein analyst Luca Solca told CNBC. 

If the war carries on for another six months, during which oil is significantly disrupted, “then this is very bad news,” he added. 

The ‘feel good’ factor

Luxury stocks come under pressure during times of heighted geopolitical and economic uncertainty because demand typically requires a “feel-good” backdrop and supportive consumer confidence, analysts say.

“Luxury demand relies on positive consumer confidence and constructive outlook of one’s future prospects, as well as the consumer experience which is often less transactional and more emotional,” RBC Capital Markets analysts wrote in a note to clients on Monday. “Conflict, shock, uncertainty and fear are not helpful in this context and can have a shortterm impact on luxury demand.” 

The impact on asset prices overall remains to be seen, but moves so far indicate that a hit, at least in the short term, is to be expected. 

There are massive uncertainties about a potential end to the conflict and when that would be, said Sokolova, however, also calling the market reaction “exaggerated” given the relatively small sales portion coming from the region. 

Travel disruption

Strikes between the U.S., Israel and Iran in the region have forced airlines to cancel thousands of flights. While some airlines said Monday they would resume a “limited number” of flights, aircraft remain largely grounded as the conflict enters its fourth day. 

The timing of the strikes also coincides with Ramadan, meaning that post-Ramadan travel may be disrupted if the conflict drags on. Travel from the Middle East after the month-long observance is predominantly to Europe, RBC said. 

“Given the timing of the Iran War conflict, and the current grounding of commercial flights, there may be a reluctance for Middle East consumers to travel post Ramadan in 2026 which would likely negatively impact a portion of luxury consumption in Europe.”

CNBC