The Briefing Room Why does the war with Iran threaten the global economy?
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Mar 12, 2026 Rosemary Kelanic, director of a Middle East program offering geopolitical context. Bill Farren-Price, gas and oil supply expert from Oxford. Duncan Weldon, economist on macro effects of energy shocks. Ben Chu, analyst on the Strait of Hormuz and energy flows. They discuss why the Strait of Hormuz matters, risks to shipping and infrastructure, how oil and gas disruptions ripple through markets, and what duration of conflict means for the global economy.
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Oil Prices Are Driven By Sentiment And Political Signals
- Oil prices spiked from ~$70 to ~$82 then to ~$120 after escalation fears, but fell when Donald Trump signalled possible end to conflict and rose again after further attacks.
- Ben Chu shows prices are highly sentiment-driven and react to political signals and IEA reserve releases.
Military Control Won't Instantly Restore Shipping Confidence
- Securing Hormuz by force is technically possible but lacks credibility; insurance costs and crew perceptions make shippers reluctant even if militaries could intervene.
- Bill Farren-Price stresses no clear political or military pathway currently convinces captains to transit safely.
Asymmetric Weapons Make The Gulf Hard To Secure
- Iran can use cheap mass-produced drones, missiles, mines and explosive speedboats across the whole Gulf to harass shipping, creating a diffuse guerrilla threat.
- Rajivri (Rosemary Kelanic) notes narrow waters make US assets vulnerable to shore-based attack.