Dr Sudershan Kumar
sudershan.sk12@gmail.com
The modern global economy is deeply interconnected, and no region illustrates this reality dramatically better than Middle East. For decades, the region has been the energy heart of the world supplying oil and natural gas that fuel industries, transportation systems, and everyday life across continents. The ongoing Middle East war involving the United States, Israel, and Iran has therefore created a crisis that extends far beyond the battlefield. What began as a geopolitical confrontation has now evolved into a global economic shock sending shock waves across billions of ordinary citizens around the world. A major turning point in the crisis occurred when Iran effectively shutdown the Strait of Hormuz one of the world’s most important maritime chocking point for energy trade. Nearly 20 percent global oil supply and large volumes of liquefied natural gas pass through this narrow passage, making it a vital artery for the global economy. With tanker traffic collapsing and shipping companies suspending operations due to security risks, the world suddenly faced one of the largest energy supply disruptions in modern history. While geopolitical conflicts in the middle east are not new, the current war has gained global attention due to its scale and the perceived role of U.S leadership under President Donald Trump. Hence the true victims of this geopolitical confrontation are not only the nations involved in the war but also the ordinary citizens across the World. Therefore, it is utmost important to understand the real cause of Iran-USA-Israel war, its impact on common man especially after the closure of the Strait of Hormuz and challenges for Government of India is clearly with this precarious situation arising out of Middle East war.
The real cause of Iran-Israel-United State war lies in combination of long standing geopolitical tensions, Iran’s nuclear ambitions, and the sudden escalation triggered by an impulsive strategic decision taken by the U.S President Donald Trump. If one turns the pages of history one finds that the relation between the United State and Iran have been hostile since 1979. Iranian Revolutions and tensions intensified over Iran’s nuclear program and its growing influence in Middle East. Israel has long viewed Iran as an existential threat because of the missile capabilities and support for anti-Israel militants groups. However, the immediate spark of the war came, when United States and Israel launched large air strikes at Iranian military and nuclear capabilities on 28 February 2026. Many analysts believe that the decision to initiate such massive strikes was taken hastily by Donald Trump without clearly defined long term strategy for regional stability.The strikes targeted key Iran infrastructure and even resulted in the death of Iran’s Supreme leader Ayatollah Khamene’i dramatically escalating the conflict and triggering retaliation across the Middle East. Critics argue that Donald Trump expected a quick collapse of Iranian resistance and even encouraged Iranian public to rise against their Government, but this assumption proved unrealistic. Instead of ending quickly,the conflict expanded into a larger regional war involving missile attacks, cyber warfare and the closure of strategic shipping routes such as Strait of Hormuz.
Thus what began as a preventive military strike driven by strategic and political calculations, soon transformed into a prolonged geopolitical crisis with serious global economic and energy consequences. Needless to mention here that one of the most immediate impacts due to closure of trade routes through the Strait of Hormuz has been the sharp rise in oil prices which surged around $100 per barrel. The experts predict, if the Middle East war is prolonged up to one month then the impact on global economy will be around 1.56% but unfortunately if it gets extended for more then three months than the impact on global economy due to oil disruption may be around 3 to 5 %. In worse case scenario, it may rise further. In that case the prices of crude oil per barrel may touch sky high. For common man, rising oil prices translate directly into higher living costs. Fuel becomes more expensive, which increases the transportation cost and raises the prices of everyday goods such as food, electricity and essential commodities. Since energy is used in almost every sector, therefore high fuel prices quickly lead to inflation across the entire economy. Studies show that even a small increase in oil prices can push consumer prices upward and reduce purchasing power for households worldwide. Therefore, it is utmost important to address the precarious situation arsing out of energy crisis due to disruption of trade routes after the closure of the Strait of Hormuz. Needless to mention here that the Government of India has taken proactive steps to protect country’s economy and ensure the availability of essential fuels.
First and foremost step taken by Government was to closely monitor fuel supply and prices through the Ministry of Petroleum and Natural Gas. High level meetings were conducted with oil companies and energy experts to address the availability of crude oil, LPG and other petroleum products and ensure their affordability for the public. Besides, the Government has also invoked emergency regulatory measures under the Essential Commodities Act to manage the distribution of natural gas and petroleum products. A four tier priority system was introduced to ensure that essential sectors such as domestic cooking gas, transportation fuel, and fertilizer plants receive priority supply, while restricting non-essential industrial consumption. The second important step was the strengthening of India’s strategic petroleum reserves and fuel inventories. India currently maintains crude oil stocks and commercial reserves that can support consumption for certain period in case of supply disruptions.
The Government has also accelerated the plans to expand these reserves to create a larger energy buffer against geopolitical shocks. Third, the most crucial is to diversify oil imports and secure alternative energy resources. The Government has also explored importing crude oil from countries such as Russia, and other non Gulf suppliers to reduce dependence on middle-eastern routes affected by the conflict. In addition, the Government initiated oil diplomatic efforts to ensure the safe passage far Indian oil tankers stranded near the Gulf region. Indian officials held discussions with Iranian authorities to allow safe movement of tankers carrying oil and liquefied natural gas destined for India. Lastly, the citizens have been advised to avoid hoarding LPG cylinders and to shift to piped natural gas whereever available. Refineries have also been instructed to increase domestic production of LPG and ensure priority supply to households, hospitals, educational institutions and many other as per requirement.
However, while the Government has been making efforts to manage the crisis, some political leaders within the country have adopted a negative and irresponsible approach by attempting to exploit the situation for their own benefits. Instead of supporting national efforts to safeguard energy security and economic reliability, certain leaders have used the crisis to spread misinformation and criticized diplomatic decisions without offering constructive alternatives. Such irresponsible political behavior can weaken national unity during the times of international crisis and create unnecessary panic among the public. The author is of the opinion that the prolonged Middle East War has unveiled the fragile nature of the global economic system.
A regional conflict has rapidly evolved into a worldwide economic crisis due to the central role of energy markets and maritime trade routes. The closure of the Strait of Hormuz has demonstrated how geopolitical tensions can disrupt global supply chains and threaten economic stability. The crisis also highlights the risks associated with unilateral military decisions taken without fully considering their global economic consequences. While the strategic calculations behind the conflict may have been driven by the security concerns, the resulting economic shocks has placed a heavy burden on ordinary citizens worldwide. For India, the crisis serves as a reminder of the urgent need to strengthen energy security, diversify supply sources and accelerate the transition towards renewable energy. By adopting proactive policies and strategic diplomacy, India can reduce its vulnerability to global energy disruptions and safeguard its economic stability. Ultimately the lessons of current crises underscores the importance of international cooperation, responsible leadership,and strategic planning in maintaining global economic stability and peace.
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