--- title: "A Regional War with Global Economic Repercussions | Ghazi Mahmoud" url: https://ghazimahmoud.com/en/articles/2026-03-18-c3ba38/ lang: en description: "The war waged by the United States and Israel against Iran continues for a third consecutive week, amid growing fears that the conflict will widen and turn into an open regional war whose repercussions extend beyond the parties directly involved." --- [All articles](https://ghazimahmoud.com/en/articles/) # A Regional War with Global Economic Repercussions [Brig. Gen. (Ret.) Dr. Ghazi Mahmoud](https://ghazimahmoud.com/en/about/) 18 Mar 2026 · 5 min read [Energy, oil and gas](https://ghazimahmoud.com/en/articles/energy/)[The world economy](https://ghazimahmoud.com/en/articles/world/)[Politics and security](https://ghazimahmoud.com/en/articles/geo/) The war waged by the United States and Israel against Iran continues for a third consecutive week, amid growing fears that the conflict will widen and turn into an open regional war whose repercussions extend beyond the parties directly involved. Compounding the gravity of this escalation is the nature of the Iranian response, which has begun targeting vital facilities in the Arab Gulf states, particularly airports and logistics installations. This has caused noticeable disruption to air and maritime navigation and led to mounting dislocations in regional transport networks and supply chains, carrying broader economic and security repercussions across the globe. Fears are mounting at the current stage that the scope of targeting could expand to include even more sensitive facilities, foremost among them water desalination plants and oil and gas installations, which form the economic lifeblood of the Gulf states and a primary source of global energy supplies. Any damage inflicted on these facilities would not be confined in its impact to the countries concerned alone, but would leave direct repercussions on global energy markets, given the pivotal role the Gulf region plays in supplying the world with oil and gas. The United States and Israel ought to have taken the repercussions of this war into account before embarking upon it. Beyond defining war aims, it is essential to assess the risks and consequences it may entail for the belligerents, for neighboring countries, and indeed for nations worldwide. This calls for an examination of the motives that prompted the launch of a war that threatens global stability and portends the outbreak of an economic crisis whose consequences the countries of the world may be unable to bear. Needless to say, the immediate causes of the US-Israeli war on Iran lie in viewing its nuclear program as a threat to global peace, alongside its ballistic and hypersonic missile program, which threatens the entire region and Israel in particular, in addition to its growing naval military capabilities, not to mention its regional alliances and networks of proxies that form a spearhead in threatening Israel and confronting US interests in the region. Yet this war is not confined to curbing the Iranian nuclear program, limiting uranium enrichment operations, and striking its nuclear and missile projects and other sources of Iranian strength. Rather, it goes further, seeking to undermine Iran's ability to expand its regional influence and project instruments of power beyond its borders, in addition to preventing it from threatening the security of maritime navigation, particularly through the Strait of Hormuz. Notably, efforts to curtail Iran's regional role cannot be separated, in their international dimension, from the broader struggle to reshape the international order and its balances of power. Despite the system of sanctions and isolation imposed on Tehran by the United States and Western countries, Iran is not, in reality, isolated in a geopolitical sense. Over recent years, Iran has succeeded in strengthening its strategic cooperation with Russia and deepening its partnerships with China, particularly within the framework of the long-term cooperation agreement signed in 2021. This has made Iran part of the group of powers seeking to diminish Western hegemony over centres of international decision-making and over global energy and trade corridors. Faced with an "asymmetric" war, Tehran relies on leveraging its geopolitical advantages, foremost among them its commanding position over the Strait of Hormuz, alongside its missile capabilities, to shift the course of the confrontation from its conventional military domain into an economic dimension by affecting global energy flows and, through them, the international economy as a whole. Even as US-Israeli strikes target Iran's military and economic capabilities, it is clear that the strategic focus of the United States is directed to a large extent toward China. The confrontation with Iran falls within a broader contest aimed at curbing the pace of China's economic rise and reasserting Washington's ability to project its influence within the structure of the international system. From this perspective, the war aims to disrupt the flow of Iranian oil to China, Washington's strategic rival, especially since those supplies move through preferential pricing mechanisms that afford Chinese industry tangible competitive advantages in lowering production costs, maintaining low inflation rates, and bolstering China's resilience during periods of global economic contraction. Accordingly, these policies form part of a wider strategy aimed at checking the trajectory of Chinese economic growth and limiting its continued expansion within the international economic system. Iran's threats to maritime security in the Strait of Hormuz, in parallel with its targeting of vital facilities in the Arab Gulf states, as well as the damage inflicted on its own infrastructure by the military attacks against it, all combine to heighten regional tensions and bring a marked rise in shipping and insurance costs. Consequently, they drive up the cost of energy supplies, particularly oil and gas, for importing nations from Europe to China, prompting those countries to search for alternative sources of supply. However, such alternatives cannot be secured immediately, nor may alternative sources, in a high-risk environment, offer the same advantages in terms of cost, sustainability, or reliability. Moreover, the need for these alternatives is not limited to China alone, but extends across a wide spectrum of countries worldwide, especially since 20% of global energy supplies pass through the Strait of Hormuz, underscoring the gravity of any threat to navigational security in the Strait of Hormuz for the global energy security architecture and its economic ramifications. The reverberations of the US-Israeli war on Iran demonstrate that its economic repercussions extend well beyond the targeted parties and the geographic theatre in which it unfolds, and are confined neither to Iran nor to its economic partners, particularly China, instead widening to affect the entire global economy. Disruptions to energy supplies through the Strait of Hormuz, rising shipping and insurance costs, and dislocated supply chains are all factors driving mounting inflationary pressures and a slowdown in global economic growth. Thus, this war is transforming from a limited regional confrontation into a crisis of international dimensions, reshaping global markets and imposing on various countries, whether importers or producers, mounting economic burdens that many economies may prove unable to absorb over the medium and long term. Translated from Arabic with AI. [Read it in Arabic](https://ghazimahmoud.com/articles/2026-03-18-c3ba38/) ## Published in - [Channel 23](https://ch23.com/Article/345777/حرب-إقليمية-بتداعيات-اقتصادية-عالمية) - [MTV Lebanon](https://www.mtv.com.lb/news/1668647) - [OZ Arab Media](https://ozarab.media/حرب-إقليمية-بتداعيات-اقتصادية-عالمية/) - [Lebanon Files](https://www.lebanonfiles.com/2026/articles/باقلامهم/حرب-إقليمية-بتداعيات-اقتصادية-عالمية/) - [Al-Duha magazine](https://dhohamagazine.com/حرب-إقليمية-بتداعيات-اقتصادية-عالمية/) ## More on energy, oil and gas [All articles on this subject](https://ghazimahmoud.com/en/articles/energy/) [4 Mar 2026 · The Global Economy in the Crosswinds of the War on Iran · Channel 23, Lebanon Files ](https://ghazimahmoud.com/en/articles/2026-03-04-843174/) [5 Feb 2026 · Financial and economic prospects of Lebanese oil wealth · Lebanese National Defense Magazine ](https://ghazimahmoud.com/en/articles/2026-02-05-426d1a/) [10 Sep 2025 · Transformations in the Global Energy Sector and Market Balance · Lebanese Army Magazine ](https://ghazimahmoud.com/en/articles/2025-09-10-07b213/)