US-Iran War-Impact on World Trade

US-Iran War-Impact on World Trade

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With the killing of Qaseem Suleimani, General of Iran, US-Iran war can be on the verge of erupting into a global economic crisis.

Iran is world’s 5th largest Crude Oil producer in the world, Crude oil which is often termed as black gold in the international market, can affect the world trade at a massive level. With the killing of Qaseem Suleimani, General of Iran, US-Iran war can be on the verge of erupting into a global economic crisis. Qaseem Suleimani was the general of Iran, and was second most powerful person in the country; he was the person responsible to eradicate ISIS out of Iran.

U.S. and its allies could face a devastating effect on their respective economy on the full blown war between US-Iran. Moreover, the Iranian regime’s survival is more threatened by an internal revolution than by a full-scale war. Because an invasion of Iran is unlikely, the regime could survive a war (despite a very damaging aerial bombing campaign) – and even benefit as Iranians rally around the government, as they briefly did in response to the killing of Suleimani. Conversely, a full-scale war and the ensuing spike in oil prices and global recession would lead to regime change in the US, which Iran badly desires. Iran not only can afford to escalate, but it has all the incentives to do so, initially through proxies and asymmetric warfare, to avoid provoking an immediate US reaction.

Effects likely to rise on the full-blown War between US-Iran

  • Global Slowdown-US-Iran war could result in global slowdown in the international market, especially in the energy and banking sector, which will start the cycle of affecting almost every sector in the country. U.S. and their allies could have worse affect to the internal market and there is a very slight chance of Iranian economy to stand the war and afford to strengthen their economy on the other hand.


  • Tension in Middle East-Middle eastern countries which are already facing terrorism crisis such as ISIS etc, could have a massive effect on their economy which as a developing country, they can’t afford, which will result in rising tension in the politics in the country and such instability is not good for any growing country


  • Civil War-Many countries are facing internal political and public tension, and on the account of war, U.S. and Iran Allies can’t withstand the tension and the countries could face civil war, civil wars will impact internal economy as well as international trades. Iran is on the verge of civil war and a very instable political environment.

Effect on Indian Economy

Indian economy with the world is facing a slowdown in the economy; India has recently hit lowest GDP growth in the past 11 years. India has significant interests in the Persian Gulf region, but it appears to have dealt itself out of the game by tamely skewing its Middle East policy in favor of the informal US-Saudi Arabia-Israel coalition. Iran was given short shrift as New Delhi went along with Trump’s ‘maximum pressure’ policy on Iran.

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