Description: After one month of the US – Israeli war on Iran, global economic consequences are continuously rising reminiscent of the crises during the covid pandemic and Russia’s invasion of Ukraine. Recent developments have shown little to no progress on the diplomatic front as US and Israel continued exchanging aerial attacks with Iran, each targeting the other’s critical infrastructure, military capacities and civilian infrastructure. The prism of the war also continues to enlarge with the Houthis entering the theater, threatening to reinstate the blockade on the Red Sea and target Saudi Arabia’s oil and gas capacities. Other Iranian proxy forces in Iraq are also active, such as Kataib Sayyid al Shuhada, Hashed al – Shaabi and Kataib Hezbollah, which have targeted American universities, embassy outposts and other US targets in Iraq. Zelenskyy’s recent visit to the Gulf compounded the enlargement of proxy states and groups in the conflict as the Ukrainian president offered assistance to the Gulf states in countering Iranian drones and ballistic missiles. Russia is also suspected of having shared crucial satellite intelligence with Iran after two Iran missiles were intercepted heading for the US naval base Diego Garcia, located in the Indian ocean. Trump’s insinuations in regard to potential negotiations were quickly downplayed by the Iranian foreign minister, especially since Trump extended the deadline for US attacks on Iranian desalination plants in exchange for the opening of the Strait of Hormuz until 06 Apr. The economic shocks of the war reverberate through oil and gas markets, rising logistics costs, costs of living, and various trade disruptions that primarily affect south and southeast Asian countries and Europe.
Impact: The extensive scope of direct and indirect participants in the conflict diminishes the effects of recent mediation efforts instigated by Pakistan, Turkey and Saudi Arabia, with the war set to continue beyond the 06 Apr deadline. The limited involvement from Iran’s proxy groups presently signifies that Iran is positioning these groups for either a prolonged war campaign or an advantageous factor in the potential upcoming negotiations. Trump’s negotiations narrative represents recycling of previous diplomatic posturing alike the one that preceded Operation Midnight Hammer and has no obvious basis for claiming direct engagement between the US and Iran or even indirect engagement through intermediaries such as Pakistan or Turkey. The conflict demonstrates global unpreparedness for economic disruptions and logistical burdens as entire regions are scrambling to find energy alternatives or stable logistical rerouting for crucial goods and commodities. Europe and southeast Asia are the regions taking the brunt of the warfare consequences while Russia and some African countries with established oil and gas infrastructure are the largest benefactors. The war accentuates the necessity for nation states to focus on devising industrial development on alternative energy sources and developing stable and secure supply – chains that could absorb wartime conditions while also incentivizing domestic manufacturing of crucial industrial capacities.