Two weeks into the US-Israel war with Iran, the conflict is beginning to move from a Middle Eastern military crisis into a global economic shock. Fighting and disruption around the Strait of Hormuz have severely constrained one of the world’s most important energy corridors, through which roughly one-fifth of global oil supplies normally move. American consumers are already responding to higher petrol prices: by 13 March, 92% of Americans surveyed by Ipsos said they had noticed higher fuel prices, 70% reported combining errands to reduce driving and 58% said they were driving less overall. Iran has therefore demonstrated something strategically important despite the enormous conventional military superiority of the United States and Israel. It does not need to defeat either country militarily to impose substantial costs upon them. By threatening the infrastructure through which the global economy receives energy, Tehran can convert geography into asymmetric power. The war is consequently becoming a useful demonstration of a principle sometimes obscured by defence-budget comparisons: power is not simply the ability to destroy an adversary; it is the ability to alter the choices available to them at a cost they cannot comfortably ignore.
The Strait of Hormuz is a particularly effective instrument because energy markets respond to risk rather than only physical shortages. A tanker does not need to be destroyed for shipping costs to rise. If insurers believe there is a meaningful probability of missile, mine or drone attack, premiums increase. Shipowners demand greater compensation, some vessels delay journeys and traders begin bidding for alternative supplies. Those costs then move through refineries into petrol, diesel, aviation fuel, fertiliser and transportation. The result is a geopolitical risk premium effectively imposed on households around the world. This is why Iran can be conventionally weaker while retaining meaningful bargaining power. A relatively small military capability located beside an indispensable chokepoint can impose economic costs far larger than the monetary value of the weapon itself.
The crisis also exposes a weakness in the idea that economic globalisation automatically makes states less vulnerable. Global supply chains create enormous efficiency because production becomes concentrated where comparative advantage is strongest. But concentration creates systemic dependence when too much of an essential commodity moves through one location. Hormuz is economically efficient in normal conditions because Gulf producers can move enormous quantities of energy through a narrow maritime route. In wartime, the same efficiency becomes fragility. Resilience therefore requires some deliberate redundancy: strategic petroleum reserves, alternative pipelines, diversified suppliers and greater domestic energy capacity. Those systems may appear inefficient when nothing goes wrong, but their economic purpose is precisely to remain underused until normal markets fail.
India has an especially strong reason to understand this distinction. As a major net importer of crude oil, India experiences a Middle Eastern conflict through its current account, inflation and fiscal system even when it remains militarily neutral. More expensive crude raises the import bill and can weaken the rupee; higher fuel and freight costs then move through agriculture, manufacturing and household consumption. The Reserve Bank eventually faces a difficult choice if energy inflation persists: tolerate part of the price shock because monetary policy cannot manufacture oil, or tighten policy enough to prevent the shock becoming embedded in broader inflation expectations. A war thousands of kilometres away can therefore reduce Indian growth without a single weapon approaching Indian territory. Economic security is national security precisely because external shocks can constrain domestic political choices.
This should also change how we think about strategic autonomy. India’s relationships with Iran, Israel, the Gulf states and the United States are sometimes criticised as inconsistent because these countries can be direct adversaries of one another. The current war demonstrates why maintaining those relationships can be rational. India does not benefit from importing every rivalry of its partners into its own foreign policy. It needs Gulf energy, Israeli technology and defence cooperation, American investment and strategic partnership, and communication with Iran because Iran sits beside crucial energy routes and remains geographically important for connectivity towards Central Asia. Strategic autonomy therefore should not mean refusing partnerships; it means preventing any partnership from acquiring enough control over Indian choices that New Delhi cannot pursue its own interests when partners conflict.
The domestic American politics of the war may eventually become as important as battlefield developments. A Reuters/Ipsos poll conducted at the beginning of the conflict found 43% of Americans disapproved of the strikes while 27% approved, with the remainder uncertain. By mid-March, polling continued to show more disapproval than approval, alongside growing concern about personal financial consequences. This matters because democratic governments do not experience the costs of war only through casualties. Voters encounter foreign policy through petrol stations, grocery bills and interest rates. A conflict presented initially as a limited security operation becomes politically harder to sustain if households begin associating it with a declining standard of living.
There is an important philosophical point here about consent and foreign policy. Presidents necessarily possess greater discretion in international crises than in ordinary domestic policy because military decisions sometimes require speed and secrecy. Yet prolonged war shifts the moral argument. The longer a conflict lasts, the harder it becomes to justify treating democratic consent as something provided once through a general presidential election. Citizens did not vote on every future military operation merely because they elected a commander-in-chief. If a conflict imposes sustained casualties, fiscal costs and economic disruption, representative institutions should have a meaningful role in determining whether the original justification remains sufficient. Executive power may initiate urgent action more efficiently; democratic legitimacy becomes more important as emergency action becomes normal policy.
The same principle applies strategically. Trump initially described the campaign in terms suggesting overwhelming force could produce rapid Iranian concessions. Two weeks later, Iran remains capable of imposing costs through missiles, drones and maritime disruption. This does not mean the United States is losing militarily. It demonstrates the difference between military dominance and political control. America can destroy more Iranian infrastructure than Iran can destroy American infrastructure. It cannot force Iran to value surrender more highly than continued resistance merely by increasing the amount destroyed. Coercion succeeds only when the adversary’s expected cost of resistance exceeds the value it assigns to the political objective being defended.
This is where wars can become unexpectedly long. The stronger side assumes the weaker actor will eventually behave according to material cost-benefit calculations. The weaker side may value sovereignty, regime survival or national dignity enough to tolerate losses the stronger state considers irrational. The stronger state then interprets continued resistance as evidence that additional force is required, while the weaker state interprets additional force as evidence that surrender would make future coercion easier. Both sides become trapped in a commitment problem where backing down appears to damage future credibility. Military escalation then continues not because either side originally wanted a long war, but because each believes stopping first would alter the terms of every future confrontation.
This is why a political endpoint needs to become clearer now rather than after months of fighting. If the American objective is preventing an Iranian nuclear weapon, then Washington needs to specify what verifiable nuclear restrictions would end military operations. If the objective has expanded towards dismantling Iran’s missile capability or transforming its political regime, the war has become fundamentally different and potentially much longer. Strategy requires discrimination between what is desirable and what is necessary. A state powerful enough to pursue several objectives simultaneously still needs to decide which objectives justify continuing the war.
The economic shock around Hormuz may ultimately impose that discipline more effectively than battlefield resistance. Iran cannot match American military power, but it can increase the price of continuing the conflict for American voters, European industries and Asian energy importers. This gives countries such as India, China and the Gulf states stronger incentives to push for diplomacy because they increasingly bear costs without controlling the military decisions producing them. The war therefore illustrates an uncomfortable feature of interdependence: states can externalise the economic cost of their security conflicts onto countries that possess little influence over how those conflicts are conducted.
The next phase should therefore be judged less by how many Iranian targets are destroyed and more by whether Washington and Tehran can define an equilibrium each prefers to continued escalation. Military superiority can create bargaining leverage, but leverage becomes strategically useful only when it is eventually exchanged for something. Otherwise force stops being an instrument of policy and becomes policy itself.
The Strait of Hormuz has made that distinction impossible to ignore. Iran remains far weaker than the United States in almost every conventional measure of national power, yet households thousands of kilometres away are already altering how they drive and spend because of what happens in a narrow stretch of water beside Iran. The war is demonstrating that the strongest state is not always the state capable of imposing the largest costs; sometimes it is the state positioned where everyone else’s vulnerabilities happen to meet.
