Hey everyone, hope you're all good. Just wanted to throw out some thoughts on something that's been all over the news lately the tensions and potential war with Iran and what that could mean for the global economy. The issues surrounding Iran aren't just about politics or military action. They could have some serious economic consequences that linger for years. Conflicts in key areas like the Middle East tend to create a lasting economic impact, reshaping trade, energy markets, and overall financial stability worldwide.
One of the first things to consider is how this situation affects oil and energy prices. The Middle East is a major source of the world's oil supply. If things heat up in that area, especially around critical shipping lanes like the Strait of Hormuz, we could see oil prices spike pretty fast. When energy prices go up, it usually leads to inflation, which hits economies and everyday folks everywhere.
Then there's the whole global trade and supply chain situation. Wars and geopolitical strife often mess with shipping routes, jack up transportation costs, and create chaos in international markets. Companies and nations might have to rethink their trade routes or look for new suppliers, which can be a lengthy and costly process.
And let’s not forget about global economic alliances. Lately, we’ve noticed countries forming new economic ties and trade groups. A long-lasting conflict could speed up this trend, potentially resulting in a more fragmented global economy where different regions rely on their own financial and trade systems. History shows that wars typically lead to these sorts of shifts.
I think all depend on how long conflict occurs, if dispute subside within couple of weeks then its just a repeated geopolitical pattern, and oil price will back to normal and no change on global energy structure. But it will be different if conflict protacted, it will redesign global energy route because global energy trade fragmented and petrodollar will still and always be dominant but there will be alternative payment settlement, we can say there are big shifting on global geoeconomy order.
We can clearly see fragmentation from world's reaction on US attck on Iran. As usual western alliance relatively solid sea Iran nuclear program as threat in other directin, many global south country even more skeptical to US military intervention and condemned US military agression to Iran. Beside that we can see that relationship between US and its middle east allay is more pragmatis than ideology, they complaining that they become Iran's counter target but on the other hand they depending on US's security guarantee. The most interesting thing, is the emerge of non alignment politic in this era which we can see from some country keep a distance with Iran-US conflict, because their actual national interest is energy stability not take side .
From above circumstance, what we can clearly see is more nations rejected unilateral intervension, the emerge of alternative block, global energy trade are diversified and resistance on US domination become stronger. The last result will be fragmentation on global geoeconomy in multipolar world.
We are already feeling the economic impact as gasoline prices have increased significantly. Im speaking based on experience in our country, because whenever fuel prices go up everything else usually follows.
Right now some people are even stocking gasoline since another increase is expected tomorrow. And this might just be the beginning, since conflicts like this rarely end quickly. Even if the war itself eventually stops, the economic effects usually continue for a long time. So in reality the impact becomes global, and many countries feel the pressure even if they are not directly involved in the conflict.
Of course, war will have a huge impact not just on the economy of countries involved, but it could bring impact globally specially we are talking about the region that supply the world with their gas oil.
And just like previous wars, it will always reshape everything specially WWII wherein countries are being born like Israel and new superpower emerges like US and Great Britain and Russia. War are costly, that's why Gold because the reserved during that time and it could also be the same in the new Middle East conflict.
If the tension increases around Iran due to the war it will not only affect the government, it will affect the ordinary people because of the high price in fuel, transportation and even in food price. And in this kind of situation some countries are forced to look for a new place or new energy sources and trade partners, which can slowly change how the global economy works
The disruption of crude oil supply will force countries that depend on Middle East suppliers to look for alternatives. Oil-producing nations in America and Africa might become alternatives. This was the same thing that happened when Russia invaded Ukraine. Many European countries that depended on Russia for gas and other supplies had to diversify their sources of supply.
Due to the location of some countries and the price of crude, some countries will still rely on Middle East countries for supplies. It will be more expensive for some countries to buy crude from Africa or America, so the Middle East will still be a major global supplier.
Your more factual to what will happen over the crude oil delivery of most nation that depends on the middle east or most of the gulf nation, though some countries will still make alternative depending how the war prolong and the level of damages it course to those nation involved in oil production around the area of war, because looking at what is happening Iran is widening the attack to make the war more broader with their surrounded nation, if there attack is mostly on oil and others minerals that will automatically reduced production and even at the end of the war will still take some time to rebuild and renovate most facilities to functions appropriately in meeting demand. If most of the sanctions places on Russia during their war with Ukraine is not been lifted most countries will be left with no option than falling to America or Africa for their oil.
This is the same with my country, the price of fuel has gone very high, up by 40% as at this afternoon. The truth is that most times there is no real impact but greedy retailers and government bodies seize opportunities like this unrest to inflate the prizes of energy in the country. It is very funny that my country is a top oil producing nation in Africa, but the price of fuel here is skyrocketing and this is pure corruption and not yet effects of the ongoing unrest in the middle east.
You make a great point about the timeline of conflict but i think the real complexity is how each country responds. For example if i say about my country Pakistan just raised fuel prices by 21%, which shows how national strategies really shape the outcome. So even a short disruption can trigger lasting changes depending on how governments act.
You raise a valid concern and it shows how quickly global conflicts can affect everyday life. However sometimes the economic pressure we feel locally is not only because of the conflict itself but also because of how governments and markets react to it as i said about my country the govt increase the fuel price upto 21%. Fuel prices are often adjusted in anticipation of risk not only because supply has already changed. When people start stocking fuel it can also create temporary shortages and push prices higher. So the real question is whether the current increases are driven by actual supply disruptions or by precaution and policy decisions. In many cases the long term impact depends more on how countries manage the situation than on the conflict alone.
This tension in the middle east is capable of reshaping the way that the world trade, supply routes etc. already we are seeing the effects of this way on the global oil price and gas because, this region produces a significant energy needs of the world. This crisis in the middle east is already causing tension because, there are different countries watching closing from a distance and quietly but just looking for ways to join.
There are different alliances in the world, and we are seeing it play out here any country that wins this war, will put herself in the control of one of the largest world energy sources which will be critical, countries like North Korea, China and Russia are key allies to Iran so this war is just beyond what it seems to appear on the surface.
What American's decline to care about is the aftermath, they never cared, they will NEVER care. They act as if they are doing a humanitarian thing, which we all know is a lie, and the only reason is oil, nothing else. Africa is in shambles and have few dictators too, have you seen them spend a billion dollars a day to help them?
North Korea is being run by some dictator, have you seen them be brave enough to do that? No. Because they fear against China. They only do it to nations they can, without any pushback, and do not care about what happens afterwards. Look at Afghanistan and Iraq, they battled, they got dictators out, and now they are even in worse state. Same will happen to Iran and Venezuela, they will leave eventually, and those nations will do even worse.
War brings immense suffering to ordinary people, but the existential threat to state power and business often forces non-trivial, innovative solutions.
Weve seen how the conflict in Ukraine transformed drone technology beyond recognition in just four years. Similarly, the Cold War pushed the U.S. to the Moon in record timea feat they havent been able to replicate since.
Oil is a curse for humanity. Asia depends on Middle Eastern oil for 60% of its needs, and for Japan, that figure is 95%. These regions are facing a crossroads: either total deindustrialization or a massive technological breakthrough.
There is, however, a third scenario: Iran being turned into a nuclear wasteland, where the 'end justifies the means.' If that happens, China could be the next nuclear desert.
I still hope for an innovative leap rather than a nuclear strike, though Trump has already promised to increase the force of the strike on Iran twenty-fold.
This is why I say Europe remains in hot seat, they are the biggest losers from this war because they can no longer get from iran and also Putin has declared oil and gas sale to Europe to come to an end. This is him not involved in this war but also dealing with Europe and those who support Ukraine. It is reason why they have no desires to join the war ,since they all benefit from the oil sale.
We study wars after and they seem inevitable. Causal. Events that had reasons and had proportional consequences. They almost never feel that way from inside.
The Strait of Hormuz. 150 tankers just sitting there. Just anchored. Waiting. All that freight, all those schedules, all those downstream industries, all those grocery stores, all those hospitals that are counting on what those ships have. They're just hanging around outside of the strait and that is because the math of risk is no longer possible. That's what a war in the Middle East really looks like from the supply chain perspective.
Your post is right in saying that the energy markets take the first hit. That's always true. But I think the second order effects of this are under-discussed in most of these conversations. There is the way disruption in one tightly-coupled system propagates through others in ways that aren't obvious until they're happening. Fertilizers. Pharmaceuticals. The exports of Indian sub-continent manufactures that pass through these same waters. None of these are oil. All of them are affected.
And then there is the question of the alliance. I'm less sure than most people seem to be that we know what's actually going on there. Because the multipolar world everyone was talking about, this BRICS-and-China and Russia anti-Western hegemony narrative, it's running into the fact that Russia can't actually help Iran even if it wanted to. China is too economically tied with Gulf Monarchies to take sides. And BRICS Pay was supposed to launch this year under much different circumstances. And, is it a coherent project when the oil flows the whole thing was built around are disrupted?
I don't know. Nobody does.
Wars don't resolve into neat new orders cleanly. They leave wreckage and people create things on wreckage. What they build is determined by who has energy and resources and political will in the aftermath. This is almost random and almost arbitrary compared to the grand narrative logic we impose afterwards. Post-WWI wreckage created the conditions for WWII. This is not a great historical precedent to be comfortable with.
So, whether this changes the energy markets and economic alliances? Yes. Everything cahnges everything. But whether or not the reshaping results in something more stable, or less so? Or whether whatever institutions are there, have any capacity to manage what's coming? Or whether we're just going to be surprised again once the next fragile assumption shatters?
We appear to keep being surprised. That part I find strange. And somewhat hard to forgive.
We've already seen the legacy in Iraq and Afghanistan - nothing seems to have changed at all. Now we're in the mist of a new war that could actually be more dangerous as they have extra ability to interfere with one of the biggest oil shipping lanes in the world. It was a really short sighted move and you can tell Trump was manipulated into the war by Israel who take any chance to take a pop at Iran. I don't particularly like either of those countries but this was doesn't seem to achieve much at all, except for spending vast amounts - billions - on single use weaponry that will have to be replenished. At the end of the day the leader of Iran has been removed but it makes little difference to the people on the ground, unless America led a ground invasion and gets stuck in another quagmire, the leadership structure stays the same.
What is worse is that, it seems like we are getting close, and that part is not the bad part that's actually good, but the entire reason why they did what they did was to kill the leader. Fine, he was a bad guy, we all agree, the whole world agrees, and now that he is gone, that's good.
But now what? Are we going to see democracy and liberated women and westernized understanding of living? Are they going to suddenly be secular? Are we getting the Iran from 50+ years ago before the regime change happened? Of course not, none of that is happening. These days, USA just goes and kills leaders and just comes back, doesn't care what happens afterwards. Iran will pick just another radical, and move on, how is that a solution, why the hell did they even do this?
I think so, and we're starting to see how each country is making decisions so that they won't be hit too much economically. So, it's time for those hugely affected by this conflict on which side they're going to be. Iran just announced that any countries who likes to pass the Strait of Hormuz needs to kick out any representative or ambassadors of US and Israel on their countries. I saw it in the news that one country has already made up a decision and that's Spain, I haven't seen any new country to be reported that decided with the said thing.
It's too early to try to guess what will change and how. It is clear that the United States has the goal of establishing full control over the entire oil trade in order to prolong the existence of the petrodollar. That is, to continue to live as before. However, this is hardly possible anymore. As for the war against Iran, there is a danger of this war escalating into an open world war (which in fact is already underway, simply in the form of local wars).
Not only the war in the Middle East, but the war between Russia and Ukraine is also an open world war
In my opinion, these two proxy wars were essentially confrontations between the two most powerful forces in the world. On one side are the United States and its allies, whose goal is to maintain its dominance and petrodollar empire. On one side are Russia and China, both of whom want to break up monopolies and open up a multipolar world
No one want war to happen, but given the current political climate, it seems inevitable. Even if these wars do not happen in 2026, they will still happen in the not too distant future, IMO