By Eric Vandenbroeck and co-workers

A campaign to rid Iran of its ballistic missiles, navy, and any lingering ambitions to develop a nuclear weapon has triggered a crisis that threatens regional stability and the global economy.

Despite a devastating air assault, the Iranian regime is still in place, lashing out in new and dangerous ways.

The Middle East is being shaken by the continuing fallout from what US President Donald Trump has described as a “short-term excursion”.

For the Iranian people, urged by Trump to “take over your government”, these are deeply traumatic times.

 

Iran - enduring power in a volatile region

Iran presents particular challenges. It is far bigger than neighboring Iraq and Afghanistan combined - two countries where US intervention was messy and lasted years.

Its military assets, such as parts of its nuclear program, are dispersed across a huge country, sometimes buried deep in mountain bunkers.

 

Its population of more than 90 million is diverse - half Persian but with a multitude of minorities, including Azerbaijanis, Kurds, and Arabs.

Its Islamic regime, in power since 1979, is deeply entrenched, ideologically motivated, and well-organized.

Despite four previous attacks by Israel since April 2024, and one by the US, its grip on power was horrifically demonstrated in January when it brutally suppressed a wave of popular protests.

Conflict rapidly escalates across the region

 

Hope gives way to panic and fear

Amid the wave of killings of protesters perpetrated by regime forces in January, Iranians heard Trump promising “help is on its way”.

When it finally arrived at the end of February, some reacted with euphoria. Videos showed Iranians celebrating the news that the supreme leader had been killed.

But as the civilian death toll has risen, hope has given way to fear and panic. In a strike on a primary school in Minab, at least 160 people, many of them children, were killed. In another, there was a desperate search for survivors in the wreckage of an apartment building in eastern Tehran.

The apartment building on Resalat Square in Tehran shortly after an air strike:

The US had spent weeks assembling one of the largest military task forces since the invasion of Iraq in 2003, including two carrier strike groups and huge numbers of aircraft.

Israel and the US, between them, possess every weapon known to man. They can fire vast numbers of accurate missiles, from a distance, to disable and destroy Iran’s defenses. They can follow up with almost inexhaustible supplies of bombs.

Iran has significant, if dwindling, stocks of ballistic missiles and drones. It may be holding some back, but after two weeks, it’s using fewer and fewer of them.

But it still has cards to play, as a spate of recent attacks on tankers at sea using “unknown projectiles” and naval “suicide” drones has shown. These will be harder to detect and destroy, and could prolong this conflict for some time.

 

Rising prices drive governments to react

The shockwaves from this war have reverberated through the global economy in ways seemingly unforeseen by the White House.

The Strait of Hormuz, a narrow waterway through which about 20% of the world’s oil passes, has been all-but choked off.

A Saudi pipeline to the Red Sea, and a smaller route to the Gulf of Oman through the United Arab Emirates, could soon help to get around this blockage. But in the meantime, disruptions in supplies of oil and gas are being felt around the globe.

In fact, it’s hard to think of a corner of the global economy that isn’t already feeling the effects of this crisis, from aviation to agriculture; plastics to shipping.

 

In the Philippines, some officials are working a four-day work week to limit travel. In Thailand, air conditioning units are being set at a minimum of 26 °C (79F) in government offices to limit electricity consumption. In Myanmar, the military government has said private vehicles can only be driven on alternate days.

In Britain and Europe, governments say they will crack down on price gouging, amid fears that energy companies are seeking to profit from the crisis.

In the US, petrol prices are surging, despite Trump’s pledges to bring them down.

Travel and tourism have also been massively disrupted, especially in Qatar and the UAE, two vital global hubs. Dubai airport, which handled about a quarter of a million passengers every day during the first half of 2025, has been hit several times by Iranian drones.

Tens of thousands of tourists and residents have fled since the war began.

Recent days have seen tankers hit by Iranian projectiles and fast boats. Faced with the overwhelming firepower of Israel and the US, Iran has clearly decided to hit back in a simple, relatively cheap but hugely disruptive manner.

 

US allies left profoundly shocked

This was a war that only two countries wanted. Israel’s Prime Minister, Benjamin Netanyahu, has made no secret of his decades-long desire to defeat a regime which he, and many Israelis, regard as a threat to the existence of the Jewish state. Donald Trump wants to see Iran’s nuclear ambitions thwarted, once and for all.

But while the two leaders share one overriding objective, it’s not clear either has given much thought to what happens afterwards. Both have spoken in vague terms of the Iranian people taking control of their own destiny, but the chaos the war may unleash does not appear to be a major concern to either.

For Washington’s Gulf allies, including Saudi Arabia and the UAE, the war has come as a profound shock. Most view Iran with suspicion and a degree of fear, but have found ways of living with their radical near-neighbor. They’re acutely aware of Iran’s ability to cause global instability but would prefer to find negotiated solutions than resort to force. Oman thought it was close to brokering a deal between US and Iran on the nuclear agenda. Hours before the strikes began, in a desperate bid to avert conflict, its foreign minister went on US television and said a deal was “within our reach”.

Further afield, other US allies find themselves facing acute dilemmas. Perhaps none more than UK Prime Minister Sir Keir Starmer, who has struggled to tread a fine line between wanting to stay out of the war and defending UK interests and allies. While the actual necessity of sending warships to the region might legitimately be discussed, the fact it has proved so difficult to do has highlighted the depleted state of Britain’s once formidable navy.

Among Tehran’s allies, Russia may regret the damage inflicted on Iran, but an unexpected windfall in oil revenues will give Moscow a much-needed shot in the arm in the midst of its costly war in Ukraine.

China, the world’s largest importer of Iranian oil, will now be looking for alternative sources at higher prices. Nor has Beijing been able to prevent an attack on a country with which it has a “Comprehensive Strategic Partnership”.

Successive US presidents have talked about the need to “pivot” to Asia and concentrate US efforts on meeting the economic and military challenges posed by a rising China. The war in Iran demonstrates, yet again, that the wider Middle East has a way of sucking America back in. Trump’s National Security Strategy, published just last November, said Iran had already been significantly weakened and that the Middle East was consequently a less troublesome region.

“The days in which the Middle East dominated American foreign policy in both long-term planning and day-to-day execution,” it said, “are thankfully over."

If only.

 

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