Why did the situation in the Middle East suddenly change? An invisible hand pushed the US and Iran to their end.
2026-06-15 21:39:49
In recent trading days, the situation in the Middle East has begun to reverse rapidly. The US and Iran were still embroiled in a gunfight last Monday, but this Monday they are set to completely cease fire and open the Strait of Hormuz. Many articles have been analyzing who has the upper hand at the negotiating table between the US and Iran, but if we broaden our perspective to the global level, the reasons for this rapid change in the situation may become clear.
Trump is currently sending signals to ease tensions in the Middle East, attempting to establish himself as a peace mediator in the region.
However, the Institute for Economics and Peace (IEP)’s “2026 Global Peace Index” uses trillions of dollars in data to intuitively reveal that the geopolitical conflict between the US and Iran has long since evolved into a global economic storm, with the economic value that effective diplomatic mediation could save up to $2.2 trillion.
The institute conducted quantitative projections for two core scenarios: if the region maintains a fragile ceasefire for a long period and shipping in the Strait of Hormuz recovers only to a limited extent, the cumulative loss to global GDP will reach US$1.3 trillion.
If the conflict between the two sides escalates again and energy transport routes are blocked on a large scale, the global economic losses will soar to $3.5 trillion. The $2.2 trillion difference between the two scenarios is the huge loss that geopolitical peace negotiations can avoid for the world, and it also confirms the irreplaceable economic significance of diplomatic détente.
The core risk of the entire conflict is anchored in the Strait of Hormuz, a global energy choke point.
Nearly 20% of global oil consumption and a large volume of liquefied natural gas foreign trade transportation rely on this waterway. Restrictions on the waterway directly disrupt the entire market chain, with global crude oil prices, ocean shipping routes, food supply chains, and international financial stability all suffering severe shocks simultaneously, and the supply and demand order in the Middle East region being completely disrupted.
In stark contrast to past traditional energy crises, the current US-Iran conflict has given rise to what the industry calls the "Hormuz Paradox".
In previous supply shocks, crude oil exporting countries were generally able to increase their revenue by rising oil prices. However, this round of shipping lane blockades directly restricts energy shipments. Most Gulf oil-producing countries are facing the dual negative impacts of rising oil prices, hindered crude oil exports, and significantly reduced revenue, resulting in squeezed profit margins from both sides.
This directly led to a dollar shortage in Middle Eastern countries, followed by a sell-off of US Treasury bonds and gold, which further damaged the US bond market and made it difficult for the US government to raise funds.
Iran is the country whose economy has suffered the most severe losses in this conflict.
With infrastructure damage, disruption of crude oil export channels, and the continued pressure of long-term multilateral sanctions, the country's economy faces the risk of a deep recession due to the combined effects of multiple negative factors.
The surrounding Gulf economies are also struggling to remain unaffected, with shipping risk premiums continuing to rise, marine insurance rates increasing significantly, supply chain expectations weakening, and the overall economic fundamentals of the region remaining under pressure.
The negative impacts of the conflict have already transcended the geographical boundaries of the Middle East and spread globally along the commodity supply chain.
The continued rise in energy prices is simultaneously amplifying three major systemic risks: global inflation, fertilizer supply shortages, and food security.
The Gulf countries are the main suppliers of core raw materials for fertilizers. Disturbances in shipping lanes have directly increased agricultural production costs in Asia and many developing economies, leading to rising costs for people's livelihoods and the real economy.
The World Bank has also issued a strong warning, stating that the combined effects of high energy prices, sticky inflation, and tightening global liquidity could push global economic growth to its lowest level since the outbreak of the COVID-19 pandemic.
Among the major global economies, Asian economies are the least able to withstand the current geopolitical risks. Major industrialized countries such as India, China, Japan, and South Korea are highly dependent on the Strait of Hormuz for oil and gas imports, and the stability of their energy supply directly determines the region's growth prospects.
Even as Trump continues to promote his various initiatives to advance peace in the Middle East, economists in the financial sector still warn that the economic impact of geopolitical conflicts has a significant lag.
In the coming years, the chain reaction of trade disruptions, rising financing costs for real economy enterprises, and increasing debt repayment pressure on highly indebted and vulnerable economies will continue to unfold, and it will take a long time for the global market to digest the financial losses caused by this round of war.
The IEP report concluded that the global impact of the US-Iran conflict has redefined the cost boundaries of modern warfare.
Today, the costs of geopolitical competition are no longer limited to the battlefield. They are transmitted through oil prices, agricultural production costs, and global shipping routes, ultimately impacting the daily consumption and household budgets of residents in various countries. A regional conflict can eventually become an economic burden shared by the entire world.
While the US blockade of Iranian oil tankers may seem to have given it an advantage, the entire conflict was instigated by the US and Israel, and the confrontation between the US and Iran has caused immense damage to the global economy, with people around the world bearing the cost. This invisible pressure makes it difficult for the US-Iran conflict to be sustained in the long term.
Trump is currently sending signals to ease tensions in the Middle East, attempting to establish himself as a peace mediator in the region.
However, the Institute for Economics and Peace (IEP)’s “2026 Global Peace Index” uses trillions of dollars in data to intuitively reveal that the geopolitical conflict between the US and Iran has long since evolved into a global economic storm, with the economic value that effective diplomatic mediation could save up to $2.2 trillion.
The institute conducted quantitative projections for two core scenarios: if the region maintains a fragile ceasefire for a long period and shipping in the Strait of Hormuz recovers only to a limited extent, the cumulative loss to global GDP will reach US$1.3 trillion.
If the conflict between the two sides escalates again and energy transport routes are blocked on a large scale, the global economic losses will soar to $3.5 trillion. The $2.2 trillion difference between the two scenarios is the huge loss that geopolitical peace negotiations can avoid for the world, and it also confirms the irreplaceable economic significance of diplomatic détente.
Strait of Hormuz: A vital energy choke point that controls global markets
The core risk of the entire conflict is anchored in the Strait of Hormuz, a global energy choke point.
Nearly 20% of global oil consumption and a large volume of liquefied natural gas foreign trade transportation rely on this waterway. Restrictions on the waterway directly disrupt the entire market chain, with global crude oil prices, ocean shipping routes, food supply chains, and international financial stability all suffering severe shocks simultaneously, and the supply and demand order in the Middle East region being completely disrupted.
In stark contrast to past traditional energy crises, the current US-Iran conflict has given rise to what the industry calls the "Hormuz Paradox".
In previous supply shocks, crude oil exporting countries were generally able to increase their revenue by rising oil prices. However, this round of shipping lane blockades directly restricts energy shipments. Most Gulf oil-producing countries are facing the dual negative impacts of rising oil prices, hindered crude oil exports, and significantly reduced revenue, resulting in squeezed profit margins from both sides.
This directly led to a dollar shortage in Middle Eastern countries, followed by a sell-off of US Treasury bonds and gold, which further damaged the US bond market and made it difficult for the US government to raise funds.
Regional economies severely damaged: Iran and Gulf states suffer double blow
Iran is the country whose economy has suffered the most severe losses in this conflict.
With infrastructure damage, disruption of crude oil export channels, and the continued pressure of long-term multilateral sanctions, the country's economy faces the risk of a deep recession due to the combined effects of multiple negative factors.
The surrounding Gulf economies are also struggling to remain unaffected, with shipping risk premiums continuing to rise, marine insurance rates increasing significantly, supply chain expectations weakening, and the overall economic fundamentals of the region remaining under pressure.
The impact spills over globally: the dual crises of inflation and food security spread.
The negative impacts of the conflict have already transcended the geographical boundaries of the Middle East and spread globally along the commodity supply chain.
The continued rise in energy prices is simultaneously amplifying three major systemic risks: global inflation, fertilizer supply shortages, and food security.
The Gulf countries are the main suppliers of core raw materials for fertilizers. Disturbances in shipping lanes have directly increased agricultural production costs in Asia and many developing economies, leading to rising costs for people's livelihoods and the real economy.
The World Bank has also issued a strong warning, stating that the combined effects of high energy prices, sticky inflation, and tightening global liquidity could push global economic growth to its lowest level since the outbreak of the COVID-19 pandemic.
Among the major global economies, Asian economies are the least able to withstand the current geopolitical risks. Major industrialized countries such as India, China, Japan, and South Korea are highly dependent on the Strait of Hormuz for oil and gas imports, and the stability of their energy supply directly determines the region's growth prospects.
The risk of lag is emerging: long-term economic losses will continue to fester.
Even as Trump continues to promote his various initiatives to advance peace in the Middle East, economists in the financial sector still warn that the economic impact of geopolitical conflicts has a significant lag.
In the coming years, the chain reaction of trade disruptions, rising financing costs for real economy enterprises, and increasing debt repayment pressure on highly indebted and vulnerable economies will continue to unfold, and it will take a long time for the global market to digest the financial losses caused by this round of war.
A new logic of war costs: regional conflicts are paid for globally.
The IEP report concluded that the global impact of the US-Iran conflict has redefined the cost boundaries of modern warfare.
Today, the costs of geopolitical competition are no longer limited to the battlefield. They are transmitted through oil prices, agricultural production costs, and global shipping routes, ultimately impacting the daily consumption and household budgets of residents in various countries. A regional conflict can eventually become an economic burden shared by the entire world.
While the US blockade of Iranian oil tankers may seem to have given it an advantage, the entire conflict was instigated by the US and Israel, and the confrontation between the US and Iran has caused immense damage to the global economy, with people around the world bearing the cost. This invisible pressure makes it difficult for the US-Iran conflict to be sustained in the long term.
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