Strategic shock in the Middle East
Iran, the Gulf, and the crisis of regional order
War in Iran is no longer simply a regional military crisis. It has become a test of the Middle East’s wider strategic order. What is unfolding is not just a contest of missiles and deterrence, but a struggle over economic resilience, maritime security, alliance credibility, and the capacity of states to absorb systemic shock.
At the centre of this instability lies the Strait of Hormuz, the narrow waterway that carries roughly one-fifth of global oil and liquefied natural gas (LNG) flows. Disruption in the strait therefore reverberates far beyond the Gulf, transmitting geopolitical tension directly into global markets.
The market reaction has already revealed the scale of the danger. In early hours trading on 9 March, Brent surged ~30% to peak above $110/barrel, following speculation that US officials discussed seizing Kharg Island, Iran’s main oil export terminal. Prices retreated towards $100/barrel on reports that G7 ministers are considering releasing oil from storage to tame prices.
These are not ordinary price movements. They are early warnings of a deeper strategic rupture, one in which instability around Iran is beginning to reshape expectations across energy markets, trade routes, maritime security, investment flows, and alliance systems.
At stake is not only the balance of military power, but whether the commercial and strategic systems that underpin stability in the Gulf can survive the fallout of great-power confrontation, write Imran Nasir Sheikh and Asim Riaz in this guest article for Energy Flux.
IN THIS DEEP DIVE
- Beyond missiles: How Iran weaponised risk to undermine shipping and exert maximum economic pain on its adversaries.
- Kharg Island: Why seizing Iran's oil hub would mark a dramatic escalation, not contain the war.
- Allies recalculating: Why Gulf states now see US bases as a liability and are quietly repricing their alliances.
- Power redefined: How endurance and systemic disruption now trump military might, and who really wins.
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