The ongoing conflict between Iran and Israel has sent global oil prices spiraling past the $100 per barrel mark for the first time in four years, triggering alarm across world economies and energy markets. As of March 10, 2026, the situation in the Middle East has entered an increasingly uncertain phase, with the United States playing a direct role in military operations through what has been dubbed “Operation Epic Fury.” The death toll on both sides continues to mount, and the Strait of Hormuz — through which nearly 20% of the world’s oil supply flows — is now under significant threat, sending shockwaves through global commodity markets.
The conflict, which escalated dramatically in early March 2026, has seen coordinated strikes by US and Israeli forces against Iranian military installations, including the Islamic Revolutionary Guard Corps (IRGC). However, reports of a US missile strike near an Iranian school, where Iranian state media claims scores of children were killed, has drawn intense international condemnation and threatened to widen the scope of the war. The United Nations Security Council has held emergency sessions, while global leaders have called for an immediate ceasefire.
Iran’s swift appointment of Mojtaba Khamenei — son of the late Supreme Leader Ayatollah Ali Khamenei — as the new head of the Islamic Republic has introduced new variables into the diplomatic equation. US President Donald Trump, who had publicly warned against selecting Mojtaba, responded sharply, suggesting the new leader “may not last.” This rhetoric has only further inflamed tensions and pushed oil markets into panic mode.
Saudi Arabia, UAE, and other Gulf nations are caught in a precarious position. On one hand, they have long-standing security concerns regarding Iran’s nuclear ambitions. On the other, the rapid militarization of the Persian Gulf is threatening their own oil revenues and economic stability. The UAE envoy made headlines when he publicly stated that a single phone call from Indian Prime Minister Narendra Modi to both Israel and Iran could potentially help end the crisis, underscoring India’s growing diplomatic stature in the region.
From India’s perspective, the crisis presents both challenges and opportunities. India imports a significant portion of its crude oil from the Middle East, and rising prices are already straining the domestic economy. The Indian government is actively weighing options to escort its cargo ships out of the increasingly choked Strait of Hormuz. A diplomatic back-channel is reportedly active, with India positioning itself as a potential mediator, given its historically warm ties with both Iran and Israel. Russia, which has offered to supply oil and gas to Europe as prices soar, may also seek India’s support in stabilizing the geopolitical situation.
The conflict has disrupted global supply chains beyond just oil. Shipping rates have surged, airline fuel surcharges have been reinstated, and global inflation fears are once again on the rise. Central banks worldwide are being forced to reconsider their interest rate strategies. The US Federal Reserve has signaled a “wait and watch” approach, while the European Central Bank is reportedly preparing contingency plans.
Israel, for its part, remains largely supportive of the war at home. A recent poll indicated that most Israelis back the military campaign against Iran, even as the country absorbs retaliatory strikes. The humanitarian cost, however, is becoming harder to ignore. Preliminary figures indicate over 200 dead in Iran, along with at least nine Israeli civilians killed and three US soldiers. Medical teams from multiple countries are working on the ground to manage the crisis.
The economic fallout extends beyond the oil sector. Global stock markets have been rattled, with Asian markets including India’s BSE Sensex seeing increased volatility. Gold prices have also surged as investors seek safe-haven assets. The IMF has warned that a prolonged conflict could shave off 1.5-2% from global GDP growth, a scenario that would be particularly painful for emerging economies that are still recovering from the financial disruptions of the mid-2020s.
China, which has maintained strategic ambiguity over the Iran-Israel conflict, is facing pressure from both sides. Being a major buyer of Iranian oil and a significant trade partner of Israel, Beijing is treading carefully. Chinese diplomatic channels are reportedly active, with President Xi Jinping’s team holding talks with counterparts in Tehran and Tel Aviv. Beijing’s ability to serve as a broker will be watched closely in the coming weeks.
As diplomatic efforts intensify, military analysts warn that the conflict could take a more dangerous turn if Mojtaba Khamenei’s leadership chooses escalation over dialogue. The new Supreme Leader’s background in the IRGC suggests a more hardline approach may be forthcoming. The world is watching carefully, hoping that cooler heads prevail before the conflict spirals into a full-scale regional war with catastrophic global consequences.