US-Israel War on Iran: Escalating Conflict and Global Economic Risks

The conflict between the US, Israel, and Iran has entered its twelfth day, marked by escalating attacks across the Middle East and significant disruptions to global oil markets. Iran has warned that a prolonged war could “destroy” the world economy, even as the US has expressed optimism for a swift resolution, a claim met with skepticism from Israel. The situation remains highly volatile, with implications for energy security, international trade, and regional stability.

Escalating Military Actions

Recent days have seen a surge in military activity. Iran’s Islamic Revolutionary Guard Corps (IRGC) launched a sustained attack on Israel, reportedly striking over 50 targets with five hours of continuous fire. CNN reports that Israel responded with “large-scale” strikes in Lebanon, targeting Hezbollah positions after receiving rocket fire.

Attacks have extended beyond Israel, and Lebanon. At least three vessels near the Strait of Hormuz were hit by projectiles, impacting ships flagged by Japan, Thailand, and the Marshall Islands. Iran claimed responsibility for attacks on Thai and Liberian-flagged vessels. The Strait of Hormuz, a critical artery for global oil supply – accounting for roughly one-fifth of the world’s oil – has been effectively closed by Iran, leading to a sharp increase in oil prices. CNN notes that despite the closure, Iran is currently exporting more oil than before the war.

Further escalating tensions, Israeli drones reportedly carried out attacks within Tehran, targeting security forces. Meanwhile, Hezbollah has continued to launch attacks on Israel, resulting in significant casualties and displacement in Lebanon. Al Jazeera provides ongoing coverage of these developments.

Economic Fallout and Global Impact

The conflict is having a significant impact on the global economy, particularly in the energy sector. Oil prices have surged since the start of the conflict on February 28th, exceeding $100 a barrel. Gulf News reported this surge over the weekend. The International Energy Agency (IEA) has authorized a record release of 400 million barrels of oil from its reserves in an attempt to stabilize prices, but the primary solution remains the reopening of the Strait of Hormuz.

Beyond oil, the conflict threatens global supply chains and food production. The Strait of Hormuz also carries a third of the world’s fertilizer, and a prolonged closure would have a devastating effect, particularly in Asia and Europe. Aramco CEO Amin H. Nasser described the situation as “the biggest crisis the region’s oil and gas industry has faced.”

The conflict has also impacted other sectors. Drones have struck fuel tanks in Bahrain and near Dubai airport, causing damage and injuries. International firms are evacuating employees from Dubai due to concerns about potential targeting of “economic centres and banks” linked to US and Israeli interests, as warned by the Iranian Revolutionary Guard Corps.

Political Developments and Leadership Changes

Iran has appointed Mojtaba Khamenei as its new supreme leader following the death of his father. This move has been rejected by US President Donald Trump. Gulf News reports that analysts anticipate a continuation of hardline policies under the new leadership. Reports indicate that Mojtaba Khamenei sustained injuries during the initial US-Israeli strikes, but officials state he is “safe.”

The UN Security Council has passed a resolution calling for Iran to halt its attacks on Gulf states, while France has urged G7 leaders to restore navigation through the Strait of Hormuz. However, the situation remains tense, with Iran continuing to threaten further escalation.

Humanitarian Crisis

The conflict is creating a mounting humanitarian crisis. The United Nations is warning of toxic black rain, mass displacement, and disrupted supply chains for life-saving goods. In Lebanon alone, over 800,000 people have been displaced. Iran claims over 1,200 people have been killed in US and Israeli strikes, though this figure has not been independently verified.