Strategic and Economic Impacts of the Iran War

The ongoing US-Israel-Iran war would not only increase inflation but would also trigger a new arms race around the world.

Abbas Hashemite

Economic Impacts of the US-Israeli Attack on Iran

The ongoing US-Israeli attack on Iran has profound strategic and economic impacts on global markets. The US and Israeli attack on Iran has not only revealed President Donald Trump’s hypocritical nature, but it has also exposed the United States and the whole world to significant dangers. The United States used nuclear negotiations as a smoke screen to catch Iran off guard. Washington and Tehran were engaged in negotiations over the Iranian nuclear program. The US repeatedly stated that it wants to prevent Iran from acquiring nuclear power. However, amidst the reports of positive developments in the second round of these peace talks, the US, and Israel conducted a combined attack on Iran. U.S. President Donald Trump said that the U.S. military conducted strikes in Iran due to reports of a possible Iranian attack on the United States. However, the Pentagon has recently rejected the claim that there were any reports of Iran’s potential first strike.

After the recent US-Israeli strikes on Iran, the threat of nuclear proliferation has increased more than ever

This reveals the hidden agenda behind these strikes. The US and Israel seek regime change in Iran to install a pro-Israel and pro-West government in the country. The US and Israeli attack on Iran targeted the Iranian Supreme Leader Ayatollah Ali Khamenei and several other top-level military leaders and government officials. The Iranian Supreme Leader, Ali Khamenei, and many other high-level officials were killed in these strikes. The US and Israel also struck other targets in Iran, igniting geopolitical tensions and a broader conflict in the Middle East and beyond. In response to the US and Israeli attack, Iran conducted missile attacks on US military assets and bases in the whole region, especially in the Gulf Cooperation Council (GCC) countries.

This US-Israeli military campaign against Iran has a profound economic fallout on the whole world, especially the GCC region. The GCC countries are highly dependent on food and agricultural imports for their survival. They import 85% of their food, including meat and vegetables, due to an arid climate, limited arable land, and water scarcity, making them vulnerable to supply chain shocks. Iran is a key supplier of food and agricultural products to the GCC. Between March 2024 and February 2025, Iran’s exports of food and agricultural products to Gulf Cooperation Council countries reached an estimated $7.6 billion. Due to the ongoing tensions, these food and agricultural supplies to the Gulf States could be disrupted by Iran.

Tehran has significant influence over the Strait of Hormuz. Soon after the US and Israeli strikes, Iran’s Revolutionary Guard blocked the Strait, disrupting the global supply chain. A quarter of global maritime oil trade, around 15 million barrels per day, flows through this route. Soon after the closure of this trade route, the oil prices jumped from $70 to $80 per barrel. In addition, Qatar has also halted its LNG production due to Iranian drone and missile strikes, resulting in around a 54% surge in gas prices in European countries. LNG prices in Asia have also jumped around 35% since then. Moreover, the price of Brent crude oil has also increased 10% since the start of the conflict. Prolonged closure of the Strait of Hormuz will further increase global energy prices. The impacts of disruption of the global supply chain will not only impact the lives of people in the Middle East or Europe, but will also have a direct impact on everyday life throughout the globe, including US citizens.

The US-Israel war with Iran and the threat of a New Arms Race

Another major implication of the US and Israeli attack on Iran is the threat of a renewed arms race and nuclear proliferation around the world. For the past few decades, the United States has attacked different countries under the false pretense of defending democracy and human rights. It attacked Iraq over the sham allegations of possession of Weapons of Mass Destruction (WMD) by the country. Its attack on Iran over the allegations of the country’s preparation to gain nuclear weapons has made all the non-nuclear states cautious. The current anarchic world is ruled by the notion that might is right, as evidenced by the US and Israel’s actions around the world. The United States also invaded Venezuela, accusing the government of supporting drug trafficking gangs without providing any evidence.

These developments have inculcated a sense of fear among the non-nuclear states. Since returning to the office, Donald Trump has repeatedly issued warnings and threats directed at member states of the European Union, escalating tensions between Washington and its transatlantic allies. He even threatened to occupy Greenland. After the recent US-Israeli strikes on Iran, the threat of nuclear proliferation has increased more than ever. France has recently announced that it would increase its nuclear arsenal to defend the country from any sort of existential threat. The Prime Minister of Poland, Donald Tusk, has also hinted that the country might seek to acquire nuclear weapons in the future. Such actions could trigger a strategic chain, leading to a renewed arms race and nuclear proliferation around the world. This demonstrates that the US and Israeli aggression around the world, especially their military campaign against Iran, has made the world more volatile and insecure.

Аbbas Hashemite is a political observer and research analyst for regional and global geopolitical issues. He is currently working as an independent researcher and journalist