The ongoing conflict involving Iran, the United States, and Israel is anticipated to result in significant repercussions beyond just escalated energy prices. This war will impact numerous sectors over an extended period, echoing effects from previous conflicts like the Gulf War of 1990 and the Ukraine crisis.

The initial wave of this crisis is apparent as energy prices, particularly for crude oil and liquefied natural gas (LNG), soar. The financial community is increasingly focusing on energy inflation, which is projected to have broad implications across various industries.

Structural Damage to Trading Systems

The second wave entails deeper, more intricate consequences resulting from the war, specifically the potential damage to the global trading infrastructure. Historical precedence, such as disruptions in the Red Sea due to prior conflicts, reveals that shifts in shipping routes can become permanent, reducing overall trade efficiency.

Political Instability Arising from Supply Chain Disruptions

Ultimately, the interplay between ongoing global conflicts and economic policies will result in political fallout that is frequently mischaracterised as failures of governance. Such misunderstandings obscure the underlying causes rooted in external shocks to the economy.

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