The missile strike this month by Tehran on Israel marks the dangerous escalation of the Middle East crisis, directly responding to Prime Minister Benjamin Netanyahu’s aggressive campaign against the “axis of resistance.” Netanyahu, for years, has been pushing to drag the U.S. into a confrontation with Iran, aiming to provoke a regional war that could destabilise the entire globe.

His efforts go as far as opposing the 2015 Iran nuclear agreement but still fighting for military strikes against Iranian nuclear sites. 

Now, a year into Israel’s continuous onslaught on Gaza, Netanyahu has heightened his game, as he now aims at Iranian elites and their proxies, which include Hezbollah and Hamas. The killing of Hezbollah leader Hassan Nasrallah in Beirut is a clear signal that Netanyahu is now on his way to open a regional conflict.

Netanyahu may believe that involving the United States in an Iran war would cement his political legacy as it would further entrench Israel’s control over this region. However, such a war would have disastrous impacts, unfolding like a full-force war regarding political, economic, and humanitarian crises that would engulf the entire region and beyond.

A Perfect Storm in Geopolitical and Economic Chaos

The key chokepoints are in the Middle East, specifically around three critical energy passages: the Strait of Hormuz, the Suez Canal, and the Bab el-Mandeb Strait. Disruption of these vital routes would wreak havoc on global energy markets. Though the West has diversified its sources of oil, it would not be immune to inevitable economic shocks—and that’s when inflation is running on steroids. A prolonged disruption might precipitate worldwide energy shortages, price hikes, and even social unrest.

The effects would be even more critical in the Middle East. Iraq, Kuwait, Saudi Arabia, and Qatar are countries critically dependent on petroleum exports and would suffer terribly if shipment routes were blocked. Most importantly, Bahrain would have to pay the heaviest toll since it relies on oil for more than 60% of its budget, and it would be adversely affected when the Strait of Hormuz was shut. Saudi Arabia and UAE—the world’s two largest oil exporters—would also lose millions of dollars.

This would badly hurt the economies of Qatar, which exports $100 billion in natural gas annually, and Kuwait, which receives $62 billion per year in oil revenue. Egypt, on the other hand, which banks its economy on the $9 billion income from Suez Canal investments, would take a great hit as the path of its natural gas exports passes through those troubled waters.

Further Implications

Failure in the economies it operates would unleash deep social unrest, with governments fighting to maintain subsidies and facing food shortages and inflation. The damage would be most severe for oil-dependent Gulf states, which need that money to keep their citizens alive. Foreign investment—the lifeblood of projects like Saudi Vision 2030—would evaporate as uncertainty discourages companies from staying in the region.

An expanding conflict would not spare the U.S., however, as the country has military bases spread all over the Middle East, and those sites could be turned into potential targets, drawing the U.S. directly into combat. The mayhem would not stop there, spreading rapidly throughout the region, imperilling American lives and global stability.

Netanyahu’s calibrated provocations could morph into a war that nobody can afford. When Iran retaliates, and the fight spreads, the world risks a catastrophic collapse of the already fragile balance in the Middle East. What Netanyahu might see as a ploy for Israeli security could inadvertently send the world to unprecedented disaster.