Since 28 February 2026, Israel and the United States have been conducting military strikes against Iran — and the conflict is reshaping risk calculations for UK businesses with alarming speed. With the Strait of Hormuz facing near-total disruption and new UK sanctions imminent, legal and financial experts warn that failing to act now could leave companies dangerously exposed.
What Has Happened Since 28 February 2026
The escalation began on 28 February 2026, when US and Israeli forces launched coordinated strikes against Iranian military infrastructure. Within days, the conflict intensified dramatically:
- 3 March: Israeli strikes hit Iran's state broadcaster (IRIB) headquarters and a session of the 84-member Assembly of Experts in Tehran
- 5 March: Iran had fired over 500 ballistic missiles, naval missiles and approximately 2,000 drones since the conflict began — 40% directed at Israel, 60% at US regional targets
- 8 March: Following the death of Supreme Leader Ali Khamenei, his son Mojtaba Khamenei was elected as the new Supreme Leader
- 17 March: Israel assassinated Ali Larijani, secretary of Iran's Supreme National Security Council
- 17-20 March: The IDF announced plans for three or more additional weeks of operations targeting Iran's defence infrastructure
Civilian and military casualties are severe. By mid-March, estimates placed civilian deaths at 600–742 and Iranian military casualties at 3,000–4,800. At least 10 Israeli civilians have been killed in counter-strikes. The UK's RAF base at Akrotiri in Cyprus was struck by an Iranian drone — bringing the conflict physically close to British military personnel.
Why UK Businesses Cannot Afford to Ignore This
An Ipsos survey published in March 2026 found that 84% of British people are concerned about the impact of the conflict on fuel and energy prices. For businesses, the financial implications run far deeper than fuel costs.
The Strait of Hormuz — through which approximately 20% of global oil and a significant proportion of liquefied natural gas (LNG) flows — is experiencing near-total disruption to tanker traffic. This is already affecting energy prices, fertiliser supply chains, and shipping costs globally.
UK Foreign Secretary David Lammy pledged in January 2026 legislation targeting Iranian finance, energy, transport, and software sectors. New UK sanctions are expected imminently. If your business — or a supplier — has any exposure to Iranian entities, new designations could trigger immediate compliance obligations.
Force Majeure: Is Your Business Protected?
The most immediate legal question for companies is whether existing contracts contain force majeure clauses that respond to this conflict. Force majeure provisions excuse a party from performance when extraordinary events make delivery impossible — but they require careful analysis.
A solicitor specialising in commercial contracts would advise:
1. Review your clause precisely Most UK contracts define force majeure narrowly. "War" typically triggers the clause, but some agreements require the conflict to be in a specific territory or to directly affect the contract's performance. A conflict in Iran may or may not trigger a UK-based supply agreement — it depends entirely on wording.
2. Notice requirements are critical Many force majeure clauses require written notice within 24–72 hours of the triggering event. If your business is already affected and you have not issued notice, you may have waived your rights. A lawyer can assess whether late notice is still arguable.
3. Mitigation duties remain Even where force majeure applies, English law generally requires the affected party to take reasonable steps to mitigate the impact. Sitting on your hands is not protected.
4. Check insurance policy exclusions Political risk and supply chain disruption insurance may have war exclusions that specifically carve out Middle East conflicts. Check your policy wording immediately with a specialist broker.
Sanctions Compliance: What to Check Now
If any of your business relationships — customers, suppliers, intermediaries, financial counterparties — have connections to Iran, you face potential UK and EU sanctions exposure. The current UK sanctions regime against Iran is already extensive; new designations will expand it further.
Actions to take immediately:
- Screen all counterparties against the UK Office of Financial Sanctions Implementation (OFSI) consolidated list
- Review contracts with entities operating in Iraq, Syria, or other countries where Iranian-backed groups have a presence
- Ensure your payment systems flag transactions involving sanctioned jurisdictions
- Document your compliance steps — OFSI takes a strict liability approach to sanctions breaches
A commercial solicitor or sanctions specialist can advise on voluntary disclosure procedures if you identify a potential breach — early disclosure typically results in significantly lower penalties.
Investment Implications for UK Portfolios
UK investors with exposure to Middle East equities, energy stocks, or emerging market funds face elevated uncertainty. The conflict has already caused volatility in oil majors, defence stocks, and broader FTSE 100 companies with regional supply chains.
A wealth manager can help you assess:
- Whether your portfolio has unintended geopolitical concentration
- How to hedge energy price exposure through commodities or diversified funds
- Which UK-listed defence and cybersecurity companies may benefit from increased government spending as a result of the conflict
The UK government is expected to announce further defence spending commitments in the coming weeks — a development that sophisticated investors are already positioning for.
Take Action Before the Situation Escalates Further
The conflict between Israel and Iran is not resolved — by all accounts, it is deepening. UK businesses and investors who treat this as a distant news story risk being caught without contractual protection, sanctions compliance, or portfolio resilience when the next escalation hits.
A legal or financial expert via Expert Zoom can provide tailored advice on your specific exposure — quickly, confidentially, and online.
Disclaimer: This article provides general information only. Sanctions law and contract interpretation are highly fact-specific. Always consult a qualified solicitor or financial adviser for advice on your situation.
