ByAnish
Economic risks heightened after US strikes Iran
US-Iran Strikes Trigger Global Economic Alarm
Tensions in the Middle East surged this weekend after the United States launched coordinated airstrikes on three Iranian nuclear facilities. President Trump hailed the operation as a “spectacular military success,” claiming it crippled Iran’s nuclear enrichment efforts. But the global economic ripples are just beginning.
At the center of concern lies the Strait of Hormuz—a narrow waterway between Iran and Oman that handles 20% of the world’s oil and gas traffic. In a retaliatory move, the Iranian Parliament has voted to shut down the strait. While not yet acted upon, such a blockade would disrupt not only US oil imports but also shipments to China, Iran’s largest oil buyer.
US Secretary of State Marco Rubio called the potential closure “suicidal,” warning of catastrophic effects on the global energy supply. Even without a full shutdown, Iran could destabilize the region by harassing commercial vessels, as seen in recent escalations since Israel struck Iranian targets earlier this month.
Shipping costs are already on the rise, particularly on routes between Shanghai and Jebel Ali, the largest port in the Arabian Gulf. This has businesses bracing for delays and increased freight charges.
The aviation sector is also feeling the heat. Over 150 airlines have rerouted or canceled flights over Israel, Iraq, and Jordan since the Iran-Israel conflict reignited on June 13. This weekend’s US strikes prompted British Airways and Singapore Airlines to divert flights away from Dubai and Doha, key transit hubs in the region.
Despite these developments, crude oil prices showed only modest gains when markets opened Sunday night—up slightly after an 11% surge earlier this month. However, experts warn that if tensions escalate, inflation could spike globally, forcing central banks to hold off on much-needed interest rate cuts.
Bottom line: The world is watching the Strait of Hormuz. Any move by Iran could tip oil markets, disrupt trade, and shake global economies already struggling to stabilize.
