The much-stoked region of the Middle East witnessed a heated confrontation between Israel, the United States and Iran on Saturday, turning the entire region into a geopolitical warzone, disrupting hundreds of flights, oil prices, international relationships and trade supply chains.
The US, Israel and Iran recently took a step that changed the landscape of middle-east alongside global trade and aviation in one of the most dramatic fashions and led to the death of multiple individuals, including school children.
The United States of America (USA) and Israel launched a ‘pre-emptive’ strike against Iran on Saturday in a move to eliminate high-ranking officials of Iran’s present leadership and paralyse the country’s nuclear infrastructure.
Iran responded to the joint strike by the US and Israel by launching its own counter-military operations targeting US bases in Qatar, the UAE, Bahrain, and major destinations in Israel.
The strikes, which hit Tehran, Isfahan, Qatar, Dubai and several other regions in the Gulf, have not only plunged the region into a state of total war but have also sent global markets into a tailspin.
With the Strait of Hormuz now a contested combat zone, the economic “risk premium” is no longer a theory but a multi-billion dollar reality.
As the smoke clears and then gathers again over Tehran and the Persian Gulf, the world is grappling with a major shift in the Middle East that’s set to strategically disrupt major global trade and communication systems.
With Operation Epic Fury (US) and Lion’s Roar (Israel) now in full swing, the stakes have moved from “deterrence” to “decisive confrontation.”
What’s at stake?
The ongoing war between Iran and Israel has effectively taken over the entire Gulf region, dictating almost every form of aviation and major economic activity that takes place in the region.
As global economies brace for heavy disruptions, we have listed some of the key aspects of the ongoing confrontation that will dictate the broader future of the world alteast for the coming weeks.
After looking at Iran’s nuclear facilities and the widespread destruction caught by the ongoing war, the attention of economists, analysts and investors has now turned to 2 key maritime trade straits near Iran, namely the Strait of Hormuz and Bab el-Mandeb.
Strait of Hormuz and energy security
For the global economy, the stakes are anchored in the 21-mile-wide Strait of Hormuz, which contributes to roughly 1/5th of the entire global oil trade. Any disruption to the strait of Hormuz, which is located in the centre of this mega clash, is set to significantly inflate oil prices around the world.
Quoting Barclays Bank, IANS reported that Brent crude, which closed at $72.87 on Friday, is expected to gap up toward $80 when Asian markets open on Monday in the event of any significant supply disruption, as the market is experiencing a risk premium due to geopolitical tensions
The IRGC has already threatened to close the Strait of Hormuz. If this “chokehold” is applied, 20% of the world’s daily oil consumption is at risk. For India, which imports a good proportion of its energy supply from the Strait of Hormuz and Bab el-Mandeb, this could send petrol and diesel prices into an inflationary spiral.
Strait of Bab el-Mandeb and trade security
Amidst these harrowing developments in the Middle East, a fresh wave of Houthi vows to “resume and escalate” attacks on commercial ships in the Red Sea-linked Bab el-Mandeb Strait has raised widespread economic concerns.
For India, this development is not just a geopolitical tremor but a major economic problem.
The Red Sea-Suez Canal corridor handles roughly 12-15% of global trade and nearly 25% of India’s total foreign trade.
With over 80% of India’s merchandise trade with Europe and the US East Coast dependent on this route, ‘a potential closure’ of the strait threatens to derail the export momentum of the final quarter of FY26.
As per the National Maritime Foundation, goods worth billions, including approximately $217 billion in exports and $205 billion in imports, rely on this route to reach Europe, North America, and North Africa.
Regime survival vs. regional anarchy
For Tehran, the stakes are existential. With Iran’s leadership and nuclear ambitions entering a critical stage, discussions about a potential regime change and economic shift in Iran have already started at major global forums.
Conversely, as per an Al Jazeera report, many analysts fear that a total collapse of the Iranian regime could create a massive power vacuum, leading to a “Syria-style” civil war on a much larger, nuclear-adjacent scale.
As per a report by Al Jazeera, the change of Iran’s leadership made under pressure from the USA and Israel is likely to have a heavy outcome for the broader Middle East region in terms of trade and international partnerships.
Reiterating the United States’ ambition to wipe out Iran’s leadership for an alleged ‘revolution for the people’, Donald Trump recently made a statement on Truth Social urging Iranians to take over the government.
“The hour of your freedom is at hand. A short time ago, the United States military began major combat operations to eliminate imminent threats. To the great people of Iran: when we are finished, take over your government. It will be yours to take. This is your only chance for generations,” Donald Trump had said.
India’s ‘diaspora’ dilemma
Over 9 million Indians live and work in the Gulf (UAE, Qatar, Saudi Arabia, Kuwait). As missiles land near Al-Udeid (Qatar) and Al-Dhafra (UAE), the safety of these citizens and the billions of dollars they send back to India in annual remittances is now in the line of fire.
Responding to the crisis in the Middle East, the Ministry of External Affairs (MEA) said India is “deeply concerned” and urged restraint, activating 24/7 helplines across missions.
Emergency numbers issued by Indian missions include:
Israel: +972-54-7520711 / +972-54-2428378
Saudi Arabia: +966-11-4884697
Iran: +989128109115 / +989128109109
Kuwait: +96565501946
Qatar: +974-55647502
Bahrain: +973-39418071
Oman: +968-98282270
Syria: +963-993385973
Iraq: +964-771-651-1185
India’s response follows widespread strikes across the Middle East that even struck places like Dubai and Abu Dhabi, resulting in the death of one Asian immigrant in the UAE.
Human death toll: 85 dead in a school strike by Israel; high-value targets hit
While the fog of war remains thick, the humanitarian cost is mounting. According to Iran’s state-run Mizan Online, the most tragic fallout occurred in southern Iran, where a strike on an elementary girls’ school in Minab has left 85 dead.
Furthermore, Israeli officials claim the operation targeted Supreme Leader Ayatollah Ali Khamenei and President Masoud Pezeshkian. While Tehran insists both are safe and have been moved to “secure locations,” unconfirmed reports suggest several senior Revolutionary Guard (IRGC) commanders were neutralised in the initial waves.