From regional war to global economic crisis: The consequence of igniting the forever war in the Middle East

The world has been holding its breath in recent days, anxiously watching to see if the United States will launch a strike on Iran's nuclear facilities. The uncertainty has only grown with US President Donald Trump's shifting stance, leaving people across the globe on edge.

At the heart of this tension is Fordow—a heavily fortified underground nuclear site near the city of Qom. It's a key part of Iran's nuclear programme, built to survive conventional attacks. Any attempt by the US to take it out would demand extreme precision and determination. But such a move could trigger a wider regional conflict, with serious military, political, and economic consequences for the entire world. 

As tensions mount, with neither Washington nor Tehran showing enthusiasm for diplomacy, the world must confront the costs of such a strike and its dire consequences. And this may truly ignite the 'forever war' in the Middle East. Israel lacks the capacity to decisively defeat Iran, while US intervention risks economic ruin and domestic upheaval. The only "winners" would be hardliners on all sides—leaving the region and the world destabilised for years

The strategic quagmire of a Fordow strike

A US strike on Fordow would aim to delay Iran's nuclear programme, but its immediate success is uncertain. Fordow's fortifications necessitate advanced bunker-busting munitions, such as the GBU-57, yet even a direct hit would likely set back Iran's enrichment capabilities by only one to three years, not eliminate them. The risk of nuclear contamination from a strike on Fordow further complicates the scenario, potentially causing environmental and humanitarian crises.

Iran has dispersed its nuclear infrastructure across multiple sites, ensuring resilience. They have sophisticated underground bunkers and storage facilities, which would require bunker-buster nuclear bombs to obliterate. 

A satellite image of the Fordow facility in Iran. Photo: Reuters.

Moreover, the strike would be seen as an act of war, triggering a chain of retaliatory measures that could engulf the Middle East in conflict. 

Iran's response would likely be multifaceted. Its ballistic missiles and drones could target US bases in Qatar, Bahrain, or Saudi Arabia, while its proxies—Hezbollah in Lebanon, Shia militias in Iraq, and the Houthis in Yemen—could attack US allies, particularly Israel and Gulf states. 

Iran's Islamic Revolutionary Guard Corps (IRGC) might disrupt the Strait of Hormuz, through which 20% of global oil flows, using mines or fast-attack boats. Cyberattacks on US or allied infrastructure and targeted strikes on Gulf oil facilities, as seen in the 2019 Abqaiq attack, are also plausible. These actions would escalate tensions, potentially drawing the US into a regional war, which Trump vowed to avoid in the first place.

Geopolitically, the strike would strain US alliances. European NATO partners, wary of unilateral actions, might criticise the move, while Gulf states could face a dilemma: tacitly supporting the US but fearing Iranian retaliation. 

Iran would likely deepen ties with Russia and China, bolstering an anti-US axis. Domestically, Iran's regime could rally public support, strengthening hardliners and sidelining reformists, as we have seen in Iran. It is hard to win over people you are actively bombing. 

The problem with an all-out war

One of the many reasons Iran emerged victorious after the Iraq-Iran War, despite being a broken country, was that the country had a large population and strategic depth. Unlike Iran, Israel does not have any strategic depth. Israel's small size makes it vulnerable to sustained bombardment, even though Iran's airpower is minute. Critical infrastructure could be rapidly degraded. With around 700,000 dual nationals (many holding US passports), a mass exodus of skilled professionals could follow, weakening the state long-term.

Since the Iran–Iraq war, Tehran has prepared precisely for an air-power mismatch. Beneath the soil lies a shadow state: scores of underground missile cities, naval pens and air bases. Iran's vast territory (80 times larger than Israel) and decades of preparation—including underground missile cities and hardened military sites—make it resilient to conventional airstrikes. Neutralising these defences would require a costly ground invasion, complicated by Iran's mountainous terrain and dispersed forces.

Like Hezbollah in 2006, Iran could claim victory merely by surviving. The US would expend vast resources without achieving decisive results, eroding its global influence. And if body bags start to return from the Middle East, the reaction would be harsh. Already, people like Tucker Carlson, Steve Bannon and Candace Owens are pushing against any military escalation against Iran. 

Global energy markets will plunge into anarchy 

A strike could disrupt Iran's oil exports (~1 million barrels per day, despite sanctions) and, more critically, threaten the Strait of Hormuz. A partial closure lasting weeks could remove 5–10 million barrels per day from global markets, pushing Brent crude prices from ~$80 to $120–$150 per barrel. Using a simple supply-demand elasticity model, a 10% reduction in global oil supply (assuming 100 million barrels daily) with a price elasticity of 0.2 could yield a 50% price increase, aligning with this range. Sustained disruptions could see prices exceed $200, reminiscent of the 1973 oil crisis.

Higher oil prices would cascade through the global economy, raising transportation and manufacturing costs. Inflation could surge by 2–4 percentage points in major economies, eroding consumer purchasing power. For context, a $50 oil price increase adds ~$1 trillion annually to global energy costs, straining budgets in oil-importing nations.

Financial and trade disruptions

Financial markets would face volatility, with energy and defence stocks fluctuating and safe-haven assets like gold and the US dollar gaining. Equity markets could decline 10–20% in the short term, reflecting uncertainty. Global trade, already fragile post-Covid, would suffer from higher shipping costs and delays if Gulf routes are disrupted. The Baltic Dry Index, a proxy for shipping costs, could spike by 30–50%, echoing 2008 peaks. 

Developing economies, particularly in Asia, would bear the brunt. Countries like India, South Korea, and Bangladesh, reliant on Gulf oil, would face ballooning import bills, depleting foreign reserves. For instance, a $50 oil price increase could add $10–15 billion annually to India's trade deficit, exacerbating currency pressures. Already, Maersk has temporarily paused Haifa port calls. 

US economic strain

The US is less vulnerable to supply shocks but not immune. Domestic gasoline prices could rise from ~$3.50 to $5 per gallon, fuelling inflation and reducing consumer spending, which drives 70% of US GDP. 

A 1% inflation increase could shave 0.5% off GDP growth, per Federal Reserve models. Military escalation would also inflate defence spending, potentially diverting $50–100 billion annually from domestic priorities, straining the federal budget.

Bangladesh will feel the heat too

Bangladesh, a fast-growing but vulnerable economy, would face acute challenges. The country imports about 70% of its energy, primarily oil and LNG, costing about $7 billion annually. A $50 oil price increase could raise this by $2–3 billion, straining foreign exchange reserves (which were $20.537 billion in  May 2025). This could weaken the taka, already under pressure, by 5–10%, driving imported inflation. 

The garment industry, contributing about 80% of export revenue ($40 billion annually), could face disruptions if shipping costs rise or global demand softens.  Remittances will be at risk. A regional conflict could reduce Gulf hiring, cutting remittances. 

Higher oil prices would cascade through the global economy, raising transportation and manufacturing costs. Inflation could surge by 2–4 percentage points in major economies, eroding consumer purchasing power.

Airspace closures in conflict zones could severely impact global aviation. Bangladesh's international connectivity relies heavily on Middle Eastern hubs like Dubai (Emirates), Doha (Qatar Airways), and Istanbul (Turkish Airlines). If more airspace shuts down—as seen during past India-Pakistan tensions—flight costs could skyrocket, hurting businesses and travellers.

The catastrophic costs of a Fordow strike underscore why diplomacy, despite resistance, is the best path forward. A military solution risks a regional war, with human tolls, economic devastation, and geopolitical fragmentation. Iran's nuclear program cannot be fully dismantled by force, and a strike may galvanise its pursuit of a nuclear weapon, undermining US objectives.

Diplomacy offers a framework for de-escalation. A revived Joint Comprehensive Plan of Action (JCPOA), with stricter inspections and phased sanctions relief, could cap Iran's nuclear ambitions while reintegrating it into global markets and stabilising energy prices. 

Historical precedent supports this: the 2015 JCPOA reduced Iran's nuclear stockpile by 98% and allowed inspections, proving negotiation's potential yield results. Regional dialogues, including Saudi Arabia and Israel, could address Iran's influence, reducing proxy conflicts.

Challenges persist. US hardliners may view diplomacy as appeasement, while Iran's leadership, bolstered by Russia and China, may demand concessions. Yet mutual interests exist: the US seeks stability for its global economy, and Iran seeks regime survival. Neutral mediators like Oman or Qatar could facilitate backchannel talks, enabling face-saving compromises that avert war.

Even so, diplomacy, though imperfect, offers a lifeline to avert war, stabilise markets, and secure long-term non-proliferation. The world cannot afford the cost of hubris; it must choose the hard but necessary path of negotiation.