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For the first time since the conclusion of World War II in 1945, a regional conflict is posing a threat of global escalation.
Governments across the globe are being compelled to align themselves, choosing either the side of the United States and Israel or that of Iran and its allied authoritarian regimes.
This geopolitical tension holds significant implications for worldwide trade and security. The global economy today is vastly more intricate than it was during the mid-20th century.
The COVID-19 pandemic revealed vulnerabilities in many nations, including the UK’s reliance on a ‘just-in-time’ supply chain model for energy and food imports. Disruptions in this chain can lead to shortages and inflation, as evidenced by empty store shelves and skyrocketing prices.
Amidst these tensions, former President Donald Trump faces pressure domestically and internationally to declare victory and bring an end to hostilities. However, Iran’s hardline Revolutionary Guard Corps shows no inclination to step back, potentially stalling any ceasefire efforts.
They have already shown themselves capable of raining hell on the civilian populations of the United Arab Emirates (UAE), Bahrain and other Gulf states – and may well be planning terrorist atrocities in the West. As the war heads into its second week, the tremors seem set to shake the planet.
The U.S.
ANTI-IRAN: America’s technology, especially in partnership with Israel, is second to none. Its missiles are accurate and its power to wreak destruction colossal.
But Iran’s drones cost as little as £3,750 apiece and can be manufactured by the hundreds daily – while a single interceptor rocket to shoot one down can cost £15million.
Trump claimed this week that US stockpiles are limitless. This is false. Iran’s drone supply could ramp up faster than America’s defences – which could be pivotal for the outcome of the war. Importantly, US politicians – among them many Republicans – are far from uniformly behind Trump. Isolationist Vice-President JD Vance has, for one, been very quiet.
Voter reaction has also been mixed – and US losses are likely to mount. In the week since the US’s attack launched on February 28, six American soldiers have been killed in Iran, with almost $2billion worth of military equipment lost.
Brazil and Mexico
PRO-IRAN: Brazil, the most populous country in South America, is an economic powerhouse.
It has good relations with Iran and is suspicious of US influence, particularly since Trump gave vocal support to imprisoned hard-Right ex-president Jair Bolsonaro.
Meanwhile, many Mexicans retain longheld sympathies for Palestinians, and see Israel in the same light as the US – as a colonial oppressor. While officially neutral, the country will privately support Iran.
Argentina
ANTI-IRAN: South America – Donald Trump’s backyard – is not a disinterested observer of a war thousands of miles away.
Argentina has been ferociously anti-Iran since at least 1994, when a Tehran-sponsored suicide bomb killed 85 people at a Jewish community centre in Buenos Aires – an atrocity orchestrated by the regime as retribution for Argentina’s decision to stop sharing nuclear secrets.
Even though his economy is reliant on cheap energy, especially for the agricultural sector, Argentinian president Javier Milei is loudly pro‑Trump and pro-Israel.
Smoke rises near Erbil International Airport, Iraq, which hosts US-led coalition troops, on Sunday
Azerbaijan
ANTI-IRAN: Only about 60 per cent of Iranians (roughly 55million people) are ethnic Persians. A further 25million are Azeri – who form the majority in Azerbaijan. If the regime in Tehran crumbles and civil war breaks out, tribal conflict between the Azeris and the Persians could quickly spread across the border. War between Iran and Azerbaijan could then sever a crucial pipeline bringing oil from the Turkish coast – with BP one of the main beneficiaries – into the Mediterranean.
Since European airlines can’t fly over Russia or Iran, Azeri airspace is a vital corridor East to West. If a passenger jet is shot down here, the route will be closed.
Britain, France and Germany
ANTI-IRAN: In a joint statement, the three major European nations deplored Iran’s attacks on Gulf states and made a qualified offer to assist the US-Israeli efforts. However, Britain in particular failed to offer support fast enough to appease Trump, who called PM Keir Starmer ‘a loser’ and ‘no Churchill’. Germany claimed to have been warned in advance of the strikes (as was Poland, a firm US ally with a strong military) but Britain and France were not.
Spain
NEUTRAL…BUT: Spanish PM Pedro Sanchez is hardly an advocate for the ayatollahs, but he initially labelled the strikes an ‘unjustified, dangerous military intervention’ that contravened international law, refusing to let America use joint Spanish military bases. A furious Trump then threatened to suspend all trade.
On Thursday, a Spanish Patriot anti-aircraft missile battery helped to shoot down an Iranian missile. But Spain’s hostility to Israel – an ancient enmity worsened by modern politics – is unlikely to shift.
Ireland
NEUTRAL: Sinn Fein has denounced the US-Israeli action as ‘an act of aggression that threatens to set the entire Middle East ablaze’. Yet the government has stopped short of condemning strikes, with Taoiseach Micheal Martin – due to meet Trump later this month – saying: ‘We believe in immediate de-escalation.’
For all the friendliness between the two countries, Irish public opinion seems to stand firmly against President Trump.
The U.S. and Israel struck Iran on Sunday, leaving plumes of smoke as seen from Doha, Qatar
Belgium, Bulgaria, Estonia, Greece and Portugal
NEUTRAL: Although Nato members, many European countries prefer to keep well out, wording their responses to the strikes carefully.
Estonia recommended ‘pressure through sanctions’, Greece and Belgium highlighted concerns for the safety of their citizens, Portugal regretted Iran’s ‘unacceptable’ violation of human rights, and Bulgaria worried about ‘dangerous military escalation’. But the longer war drags on, the more likely they’ll be forced to pick a side.
Russia
PRO-IRAN: The biggest winner from the conflict so far is Vladimir Putin. With Iran unable to export much of its oil, soaring global energy prices are again boosting Russia’s war chest for the quagmire in Ukraine.
Iran is a longstanding ‘strategic partner’ of the Kremlin, and has been supplying the Russian military with swarms of Shahed suicide drones. Russia, too, produces thousands of drones and sells them back to Iran, while supplying the mullahs with aircraft, missiles and anti-aircraft systems as well as satellite intelligence. Russia also opens its banks to Iran to dodge American and EU sanctions.
China
PRO-IRAN: This is the most dangerous flashpoint. China needs Iran’s oil for its military vehicles and warplanes, and buys it despite international sanctions. Beijing’s warships are sailing into the Arabian Gulf to escort Iranian tankers.
If, by accident or in an act of self-defence, a US missile hits a Chinese ship, or if China fires on a US plane, the world could be plunged into all-out war between East and West.
Even without that terrifying scenario, Beijing is helping Iran. Its satellites are tracking missile launches from Israeli bases and US carriers in the Indian Ocean – and feeding this crucial intelligence to Tehran. China is also believed to be smuggling aid and ordnance such as ammunition, drones and perhaps missiles to help the mullahs.
An oil tanker, Skylight, was hit off Oman’s Musandam peninsula on Sunday
Egypt
NEUTRAL: In 1979 Egypt infuriated Iran by striking a peace deal with Israel and offering sanctuary to the ousted Shah.
Egypt has long been subsidised by Saudi Arabia and the UAE, who believe its large army would be useful in a future conflict. But if Iran’s proxies in Yemen, the Houthis, successfully blockade the Red Sea, energy revenues will collapse – and with them much Arab support. Egypt may find that its neutrality cannot hold, and it will be forced to side against Iran.
India
NEUTRAL…FOR NOW: India is successfully walking a tightrope. Prime Minister Narendra Modi has just signed trade and defence deals with Israel. But India is also a major oil importer from the Gulf region, and relies on buying natural gas for making fertiliser. (Delhi also retains strong links with Moscow and has refused to condemn Putin’s invasion of Ukraine.) Whatever its stance, India has much to lose if the war drags on.
South Africa
PRO-IRAN: Since the Nelson Mandela era, South Africa has been hostile to Israel, even bringing charges of ‘genocide’ against it at the International Court of Justice in the Hague, over the war with Hamas in the Gaza Strip.
The current government, led by President Cyril Ramaphosa, also remembers Iranian support in the apartheid era, when Tehran refused to supply the white supremacist government with oil.
Australia
ANTI-IRAN: While Britain vacillated under Keir Starmer, Australia has publicly supported the US/Israeli action, though it has not sent any forces. Public opinion is widely supportive of America, especially in the aftermath of last December’s Bondi Beach massacre, carried out by Islamist extremists.
However, Australia draws about 30 per cent of its energy imports from the Gulf and exports a lot of mutton there, so the war’s economic impact – with trade from the UAE, Qatar, Kuwait and Iraq all blocked or sharply reduced – will be significant.
Japan and South Korea
ANTI-IRAN: Japan and South Korea are rock-solid US allies. But these big industrial economies – along with Singapore and Taiwan – are energy-hungry importers of oil and gas from the Gulf countries, including Iran. If producers of cars and consumer goods cannot get energy, production will stall. Getting goods to European markets will also be much more expensive if the route to the Suez Canal becomes too dangerous.
South Korea has one of the world’s largest armed forces with 3.5million personnel, should it be needed.
- Mark Almond is director of the Crisis Research Institute, OxfordÂ