New Delhi, April 20 -- The 2026 US and Israel war against Iran has fundamentally ruptured the existing political order, transitioning the Middle East from a "shadow war" into a direct, volatile regional conflagration. The Iranian retaliation, resulting in the de facto closure of the Strait of Hormuz, has inflicted a severe energy shock, driving oil prices above $100 per barrel and causing systemic disruptions to global supply chains. Consequently, this war is not merely a localised event but a catalyst for a volatile new landscape impacting different global players.
The war has brutally shattered the security illusion of the Gulf Cooperation Council, dismantling the long-held perception that these nations were insulated safe havens focused on economic development. Iran's widespread retaliation, targeting vital energy infrastructure, ports, and airports across all six GCC members, resulted in the closure of the Strait of Hormuz and brought the regional war to their doorsteps, exposing the limitations of relying on the United States for security while proving that local detente efforts with Tehran were ineffective. Consequently, the Gulf states have been forced into a reassessment of their foreign policies to face an increasingly hostile and unpredictable Iran.
The conflict has introduced severe economic and strategic pressures on India, primarily driven by its heavy reliance on the Middle East for energy. With the disruption of the Strait of Hormuz, through which a significant portion of India's crude oil and nearly 90 per cent of its Liquefied Petroleum Gas (LPG) passes, energy security has been compromised, causing a surge in LPG prices, domestic fuel price hikes, and potential supply shortages for industries. Indian maritime security is also on high alert, with the navy on standby to protect shipping lanes.
The conflict has created significant instability for the estimated 9-10 million Indian diaspora members residing in the Arab Gulf countries (GCC), transforming from a distant geopolitical event into a direct, daily risk for many. As Iranian drones and missiles have targeted areas near U.S. military bases and critical infrastructure in countries like the UAE, Saudi Arabia, and Qatar, Indian workers-a vast majority in construction, retail, and hospitality-have faced panic, disrupted daily commutes, and temporary shutdowns of work sites. If the situation escalates, it threatens not only the safety of the workers but also the steady inflow of remittances-crucial to the Indian economy-due to potential job losses in the stalled economic sectors.
The war in Iran is placing a significant strain on NATO, eroding internal trust and exposing a deep divide between U.S. and European strategic priorities. As Washington leads a high-stakes campaign against Tehran, often without prior consultation with allies, many European members are focusing on the security of their own continent-particularly the ongoing conflict in Ukraine-leading to a "two-track" NATO where Europe offers only minimal support for U.S. actions. This divergence has fueled tensions, with US leadership criticising NATO allies as "cowards" or "paper tigers" for resisting involvement, and even threatening to reconsider the value of the alliance.
For Russia, the war has emerged as a significant geopolitical and economic boon, primarily by alleviating the economic strain caused by its ongoing invasion of Ukraine and distracting Western allies. As the conflict disrupted energy supplies in the Persian Gulf, oil prices surged, allowing Russia to fill the supply gap, boost its export revenues, and secure a potential windfall of tens of billions of dollars. Furthermore, the conflict has forced the United States to prioritise the Middle East, reducing the immediacy of Western diplomatic pressure on Moscow and, crucially, diverting military resources and air defence ammunition that could otherwise have been supplied to Ukraine.
As regards China, the Iran war has created significant, multifaceted challenges, forcing Beijing to balance its reliance on Iranian oil with the need for global economic stability. As the world's largest oil importer, China faces immediate threats from surging energy prices and disruptions to shipping routes, specifically in the Strait of Hormuz, where a substantial portion of its oil and LNG passes. Geopolitically, the conflict has weakened China's "strategic partnership" with Iran, which saw its Iranian oil ecosystem disrupted, while creating a dilemma for Beijing in supporting a key ally without triggering direct conflict with the United States.
The ongoing conflict involving Iran is heavily impacting Japan, primarily by threatening its energy security and triggering inflationary pressures on its fragile economy. Because Japan depends on the Middle East for over 90 per cent of its crude oil imports-much of which passes through the volatile Strait of Hormuz-the effective blockade of this route has forced Tokyo to release 80 million barrels from its emergency reserves, its largest ever, to combat shortages. The spike in oil prices has raised fuel costs, worsened the business environment and triggered inflation on goods and shipping, forcing the Bank of Japan to reconsider hiking interest rates.
The above are some manifestations of how the Iran war has fundamentally dismantled the post-1979 regional order and is reshaping the global geopolitical landscape. The conflict has exposed deep vulnerabilities in maritime chokepoints like the Strait of Hormuz, accelerating a geoeconomic shift toward supply chain diversification and a global surge in energy costs. Arab nations are forced into a "security paradox" of choosing between long-term economic reforms and immediate survival. Ultimately, the war has demonstrated a breakdown of international norms, thereby accelerating the transition toward a chaotic global order.
Views expressed are personal. The writer is a retired Indian diplomat and had previously served as Consul General in New York
Published by HT Digital Content Services with permission from Millennium Post.