- Iran’s attack on Israel and Israel's subsequent retaliation to the attack has sparked tensions in the Middle East and beyond.
- Previously, Iranian-backed Palestinian group Hamas launched a coordinated and large attack on Israel in 2023.
- Concerns related to Instability/ Conflicts in the Middle East Region:
- Effect on Global Trade:
- Shipping disruptions in the Strait of Hormuz and Red Sea.
- Recently, Iran seized Israel-linked ship near the Strait of Hormuz (world's most important oil chokepoint).
- Houthis (supported by Iran) hijacked a commercial ship in the Red Sea (approx. 12 % of global trade passes through this route, including Suez Canal).
- Energy Security, volatility in oil and prices may increase as Iran is a key producer of crude oil within OPEC (Organization of the Petroleum Exporting Countries).
- Shipping disruptions in the Strait of Hormuz and Red Sea.
- Israel is believed to be nuclear-capable therefore conflict can lead to a nuclear flashpoint.
- Global South and global governance would also be impacted by continuing instability in the Middle East.
- Effect on Global Trade:
- Impacts on India: Affects security of large Indian diaspora, supply of crude oil will be disrupted, increased risk of piracy and hostage-taking, etc.