The Iran War’s Global Reach

The fighting is raising energy prices, hitting farmers and reshaping geopolitics. We look at the ripple effects worldwide.

By Katrin Bennhold

The war in Iran is not a world war. But it is a war affecting much of the world.

Two weeks in, it’s had ripple effects on trade routes, travel patterns, energy prices, alliances and living costs around the globe. Far from the battlefield, residents in Kolkata are queuing for gas, tourists are fleeing Cyprus and farmers in the Northern Hemisphere are getting nervous about the spring planting season.

It’s also reshaping geopolitics: For Russia, it’s a win. For China, less so — but that could change. Today, I’m writing about some of the far-reaching consequences of the war.

Global shock waves from war

Before the war in Iran, Russia’s finances were looking dire.

Last year, the country’s oil and gas revenues declined by nearly a quarter — the result of falling prices and Western sanctions related to Russia’s own war in Ukraine. Its economy was under strain.

Yet Vladimir Putin sounded awfully pleased — maybe even smug — speaking on Wednesday about European nations’ plans to phase out Russian gas imports in response to the invasion of Ukraine. With so many countries newly desperate for energy, maybe, he suggested, Russia would be the one phasing out Europe.

“Now other markets are opening up, and perhaps it’s more advantageous for us to stop supplying the European market,” he said.

This probably isn’t what U.S. policymakers had in mind two weeks ago when they launched the war.

The Gulf region is one of the most interconnected areas of the globe. It’s a place where business, geopolitics, energy and immigration meet. While the Iran war may have started in the Middle East, it was unlikely to stay contained there.

Over the past two weeks, my colleagues around the world have been documenting the ways the war has been playing out in their regions. Some of these second-order consequences — like Putin’s happiness about oil prices — were, arguably, predictable; others less so. What they all point to is how much this war has done to reshape the world after just two weeks — and it doesn’t seem to be over yet.

A ‘triumphant’ Moscow

The rising oil prices as a result of the war were already a gift to Moscow, a major oil exporter whose energy proceeds bankroll the war in Ukraine.

But as my colleagues Ivan Nechepurenko and Paul Sonne write, a decision on Thursday by the U.S. to temporarily lift some sanctions on Russian oil was the cherry on top: an implicit admission that the U.S. can’t contain the energy shock it unleashed through the war without Russia.

The mood in Moscow? “Triumphant,” they write.

The mood in Ukraine? Concerned.

Analysts don’t believe the suspension of sanctions will actually do much to ease oil prices. But it will reduce the discount that Russia has had to offer buyers of its oil since it invaded Ukraine in 2022, leaving it more money for its war efforts.

Ukraine has already been scrambling for the world’s attention — and American weapons systems — as a result of the Iran war. The decision to lift Russian sanctions, Ukraine’s president, Volodymyr Zelensky, said on Friday, “certainly does not help peace.”

An uncertain China

There’s a lot that China doesn’t like about this war, my colleagues write. But in the long run, it might come out ahead.

The fighting is definitely not good for business. China imports more than half its seaborne crude from the Gulf region. Iran, which formerly accounted for about a quarter of that, was a particularly cheap source: It sold oil to Beijing at a discount.

Chinese exports to the region were also growing rapidly last year, in part because of ongoing trade tensions with the U.S. The war isn’t good for those, either.

But when it comes to freedom of action in its own region, China potentially stands to gain.

My colleagues based in Asia have written about just how much military capability the U.S. has pulled out of the Pacific in the past two weeks.

A carrier strike group has been redirected away from the South China Sea. The THAAD missile defense systems in South Korea — “the apex defenders of the American arsenal,” according to my colleagues — are being moved to defend against Iranian drones and rockets. Japan and Taiwan may face delays in their own deliveries of American arms.

The war in Iran is putting strain on America’s security promises in Asia — to China’s benefit.

Collateral damage

The war has made itself felt as far away as:

• Cyprus, where a drone — seemingly launched by Hezbollah — hit a British air base. The strike prompted France, Spain, Greece, Italy and the Netherlands to send warships to the island, contributing to concerns among Europeans that their countries are getting pulled into the conflict.

• South Asia, where fears about spiking energy costs are affecting daily life. In India, restaurants have removed slow-simmered dishes from their menus because they use too much gas. Brick and tile makers, ceramists who use glass kilns, and spaces like crematories, laundries and hospital kitchens are all struggling to keep operations running, while bakeries, street-food vendors and community kitchens face cuts. In Bangladesh, universities have closed to conserve electricity. In Pakistan, the government raised fuel prices by 20 percent overnight. (South Asia is also home to many of the migrant workers who live in the Gulf. Watch my video above with my colleague Vivian Nereim about the war’s effect on these workers.)

• Across the Northern Hemisphere, where farmers can’t get the fertilizer they need to prepare for the spring planting season. The same nations that produce much of the world’s oil — Iran, Saudi Arabia, Qatar, the United Arab Emirates and Bahrain — also produce much of the world’s fertilizer. That’s also trapped by the closure of the Strait of Hormuz.

“War has a way of exposing vulnerabilities that arise from interconnection,” my colleague Peter Goodman writes. We’re seeing that play out now in a particularly interconnected place; it’s how the consequences of a regional war go global.