Beyond economics: fracturing the global order
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The global economy is facing a system-level shock due to the escalating tensions between the US and Iran, which is disrupting energy markets, financial channels, and trade corridors. This crisis has the potential to leave lasting scars on the global economy and the structure of the global order itself, with possible oil price spikes, supply dislocations, and heightened uncertainty across global markets.
The US and Iran are engaged in a dangerous escalation that is becoming a system-level shock. The global economy's dependence on critical energy chokepoints, such as the Strait of Hormuz, is a structural vulnerability. Disruptions have already caused sharp price spikes and supply dislocations. The question is how long the disruption will persist and what lasting damage it will inflict. A prolonged escalation could push oil prices into the $120-150 per barrel range. The damage to the global economy could be deep and prolonged, with strain on financial channels and geopolitical stability.
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