Iran16 March, 20261 min read
Iran War Could Hammer Global Economy as Markets Underestimate Prolonged Conflict
Iran war exposes fragile chokepoints in energy, fertilisers, and industrial gas supply chains. Supply disruptions could shape global prices and trade long after the conflict ends.
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Global Economic Risk
The Iran war is emerging as a significant threat to global economic stability, with markets underestimating the potential damage from prolonged conflict, according to economic experts. Frederic Schneider, a senior fellow at the Middle East Council on Global Affairs, warns that markets are underestimating the risk of a prolonged war, which could lead to severe economic consequences. If the conflict continues for another month and energy prices rise sharply, experts predict an economic slump combined with interest rate hikes to curb inflation.
“Markets may be underestimating how damaging the Iran war could become for the global economy if the conflict drags on longer than investors expect, economists say.”
Such a combination could trigger the bursting of asset bubbles and potentially lead to another debt crisis similar to the one seen in 2008. The conflict's impact extends beyond immediate battlefield concerns to expose fragile economic chokepoints that could shape global prices and trade long after the fighting ends.