The Crisis Hidden Inside the Iran War

The global economy faces a potential supply cliff due to the war in Iran, extending beyond oil prices to critical commodities like LNG, helium, fertilizer, and aluminum. Despite potential peace negotiations, bottlenecks such as shut-in wells, a naval gauntlet in the Strait of Hormuz, and logistical logjams will hinder immediate recovery. While developed nations shield themselves through subsidies, poorer countries bear the brunt of energy scarcity, leading to rationing and potential food insecurity. Winners of the conflict include Russia and China, while Europe and the UK face significant economic and strategic challenges. The US faces imported inflation and pressure on its economy, signaling a shift where economic vulnerabilities become key targets. The crisis highlights the effectiveness of asymmetric disruption and the end of security by distance, reshaping geopolitical alliances around energy security.