For U.S. Business, Israel vs. Iran Is Not Another Gaza

Israel preemptively struck Iran on June 13, killing a number of top Iranian military leaders and hitting facilities it claims were part of Iran’s nuclear program. Oil futures rose on the news, and concerns of a broader regional conflict caused the VIX Index (a measure of stock market volatility) to spike and gold prices to rise, before all reversing on Monday. The market reaction reminded the world once again (as if it needed it) that geopolitical risk is capable of catching markets and companies flat-footed. An Israel-Iran war would indeed be a disaster, but for companies watching the conflict unfold — and specifically U.S. companies concerned about boycotts and reputational fallout — it would be a mistake to think that an Israel-Iran war would take a similar shape and pose comparable risks for business as the war in Gaza. 

Why this conflict would be different for business than the one in Gaza

The primary impacts on U.S. businesses stemming from the conflict in Gaza have been reputational. A constant drumbeat of social media posts, domestic activism, and revelations of human rights violations in Gaza have caused consumers in many markets to boycott or decrease their spending with brands perceived as supportive of Israel, many of which were U.S. brands. From the beginning, consumers in wealthy markets have been paying more attention to Gaza than they usually do to global conflicts, creating outsized risks for consumer goods companies who do business in the region: Nearly three years into the conflict, research shows some consumers are still actively boycotting companies since the launch of Israel’s ground invasion. 

But a protracted conflict between Israel and Iran would be different. First, despite Israel instigating this weekend’s back-and-forth with Iran, global public views of Israel —- which we measure on a net favorability basis across 42 other markets daily — have barely budged. This is true even when looking at the measure disaggregated into its components. The stability in views of Israel is especially stark when compared with the huge drop in favorability toward it driven by dramatic increases in unfavorable views after the conflict in Gaza began in October 2023. At the time, negative shifts in views of Israel were somewhat delayed due to an initial outpouring of sympathy for it before Prime Minister Netanyahu's government retaliated against Hamas with a ground offensive. Zooming in to focus on just 2025 year-to-date, the lack of movement in views of Israel is more apparent. 

For Iran, by contrast, we see smaller movements in public sentiment around the Israel-Hamas conflict. This makes sense: Iran was only involved in that conflict via its support for Hamas and other proxies in the region like Lebanese Hezbollah. Even so, its reputation did slightly drop globally. It is too soon to say how global public opinion may shift in response to recent events, which began only three days ago. But zooming in to our data from this past weekend, it appears that Iran’s missile attacks may have started a slight negative shift in public attitudes against the Islamic Republic. 

Iran is not a sympathetic victim in the brewing conflict

We previously noted that global public sympathy for Palestinian civilians did not equate to support for Iran in the context of the Israel-Hamas conflict, in contravention of some public narratives. We are seeing confirmation of that finding play out again now. Iran, in fact, is one of the least popular nations globally. Compared even to a measure of views of Palestine as a potential nation — another metric we track daily, and for which favorability is almost certainly lower than views of Palestinians themselves and public sympathy for their current plight — Iran is viewed net positively in only six of the 43 countries where we survey daily. 

Even in Middle Eastern countries where boycotts of U.S. companies over Washington’s support for Israel have been widespread, views of Israel have not dropped notably in recent days, nor have Iran’s risen. Egypt is the one exception where it appears that public favorability toward Iran may have already risen beyond what could be considered normal volatility. Egypt is not one of Iran’s rivals in the Gulf, nor does it share a border with Iran, so its citizens may feel less conflicted about the prospect of Iran gaining influence in the region. 

Perceptions of U.S. involvement are more ambiguous this time around

The key factor in global consumers boycotting U.S. companies in relation to Gaza was their perceptions that Washington was strongly supporting Israel in a highly unpopular ground offensive which resulted in the death of tens of thousands of civilians. Two elements are less clear now: first, the level of public sympathy for Iran, which we noted above, and second, how strongly the United States is perceived to be supporting Israel. 

At this early stage, the impact of the Israel-Iran conflict on public views of the United States in Israel’s and Iran’s backyard remains difficult to parse. Recently, there has been more daylight between U.S. and Israeli actions in the region. The most obvious manifestation of this was Trump’s May 13-16 trip to the Gulf in which he visited Qatar, the United Arab Emirates and Saudi Arabia, but neglected to stop through Israel. That trip coincided with a noteworthy rebound in favorability toward the United States in the Gulf (which, like in most countries, had previously sunk on tariff announcements), and to a lesser extent in the broader region, as can be seen in the chart below. Israel in turn has been making threats that could be seen as counterproductive to Trump’s efforts to conclude a new Iran nuclear deal, culminating in Friday’s preemptive attacks. 

But we are cautious about attributing the more recent decline in favorability toward the United States — in the Emirates and Saudi Arabia specifically — to the onset of the latest Israel-Iran conflict. While the timing overlaps, the decline in our data predates the conflict by several days, and also coincides with the breakdown of nuclear negotiations between Washington and Tehran, suggesting it may have other drivers. The shift is also not noticeably larger than typical volatility in these data series. Views of the United States in Egypt and Turkey are meanwhile relatively flat, further suggesting the verdict is still out on the impact of the conflict with Iran on this front. And in other countries with large Muslim populations — like Indonesia, Malaysia and Pakistan — trends in our data are similarly mixed.

Understanding the range of corporate risks arising from an Israel-Iran conflict 

For the reasons outlined above, we assess that a longer-term conflict between Iran and Israel would pose fewer reputational and boycott risks for U.S. companies doing business in the immediate region and beyond (for example, in countries in Asia with large Muslim populations like Indonesia and Malaysia that have historically been antagonistic toward Israel, and toward Washington for supporting it). This is good news for U.S. multinationals who contended with widespread public fallout and boycotts in the Middle East a few years back, and who remained concerned about a fragile recovery of America’s reputation in the region (and by extension their own), particularly with the Trump administration’s tariff war riling the public up globally. A partial exception to this would be if Washington put its full military might behind Israel. Not only would this expose U.S. companies to more reputational risks, but it would be negative for the United States’ already dubious fiscal position, raising fears of the risk-free nature of U.S. Treasury assets.

Other risks for U.S. companies and markets still exist, but are more macro in nature. The Strait of Hormuz, which funnels around one fifth of the world’s crude oil shipments, remains an important bottleneck, and oil futures spiked and dipped over the weekend as investors followed the news. But the strait between the Persian Gulf and the Arabian Sea is less relevant for global shipping apart from oil, carrying only 2-3% of global container traffic. This means that while companies’ energy bills could increase, shipments of consumer products are less likely to be hugely disrupted, although global container capacity would be further stretched. And while the Yemeni Houthis joined in attacks on Israel over the weekend, raising fears of renewed attacks on shipping in the Red Sea, container traffic had not really resumed after the May ceasefire. So the possibility of renewed hostilities will not pose a major shock to shipping costs and timing via that route. 

U.S. and global companies alike should stay attuned to these dynamics. But those reeling from several years of reputational fallout among global consumers since the Israel-Hamas conflict first began can rest easy, at least for now.