War Without Borders: Global Leadership on the Line
The question is no longer just how the conflict will end, but what global order will emerge from its ruins.
The confrontation between Iran, on one side, and the United States and the Israeli occupation state, on the other, has escalated from limited, rapid tactical strikes into an open conflict targeting vital infrastructure, energy facilities, and international shipping routes. It can no longer be described as a local military incident or a regional dispute confined to the Middle East.
From its earliest stages, the war has moved beyond its narrow geographic boundaries, evolving into a crisis with global repercussions that threaten the stability of the international economy, energy security, and global supply chains.
The shift in the nature of military operations—from localised skirmishes to direct attacks on power grids, oil refineries, and shipping routes—has turned a region already at the heart of global energy supplies into a strategic choke point threatening significant parts of the global economy. The Strait of Hormuz alone handles around 20% of the world’s daily oil trade, according to the International Energy Agency. Any prolonged disruption would not only drive up oil prices but could also trigger a global energy shock, with far-reaching impacts on inflation, growth, and employment across dozens of energy-importing nations.
These concerns have already been reflected in international economic indicators. An IMF rule of thumb suggests that every $10 increase in the price of a barrel of oil reduces global GDP growth by an average of 0.2 to 0.3 percentage points in a single year. Price increases of more than $40 within weeks therefore imply potential losses in hundreds of billions of dollars in global output.
Global leaders and policymakers have warned that the conflict could expand into a broader regional war or indirect international confrontation. The UN Secretary-General has repeatedly noted that attacks on civilian infrastructure and energy facilities could lead to uncontrollable consequences, emphasising that the world faces a dangerous turning point that could reshape the entire international system.
From a strategic perspective, analysts at research centres such as the Brookings Institution say the conflict marks a shift away from traditional battles over territory and influence towards efforts to undermine opponents’ economic capacity. In modern military thinking, this is often described as “economic warfare” or infrastructure warfare — where the aim is not just to weaken armed forces, but to disrupt the functioning of the state, society, and economy all at once.
With the global economy valued at about $120 trillion in 2026, according to the World Bank, any prolonged disruption in energy supplies or maritime trade routes is unlikely to remain limited to the conflict zone. Instead, the effects ripple through financial markets and global supply chains, reaching countries thousands of kilometres from the fighting. For many governments, this means the war is no longer seen simply as a Middle Eastern crisis, but as a direct test of how resilient the global economic system is to major geopolitical shocks.
Describing the conflict as a “regional war” is therefore inadequate. What is unfolding is a multi-level confrontation: military on the ground, economic in the markets, political within international institutions, and strategic in the calculations of major powers, all observing that this crisis may redraw global power balances.
The effects of this transformation are already visible in markets and international institutions. It is rarely military forces that react first, but investor confidence and energy flows. As threats have intensified against oil facilities and shipping routes—particularly the Strait of Hormuz—energy markets have repriced risk faster than developments on the ground, with futures rising sharply on expectations of supply disruptions, a phenomenon known as the “geopolitical risk premium.”
This early reaction highlights how modern economies no longer wait for a crisis to unfold before feeling its impact. Instead, they respond to the mere possibility of disruption — meaning contemporary wars can trigger global economic turbulence even before they escalate militarily.
Financial institutions such as the IMF warn that continued tensions in energy-producing regions could fuel a new wave of global inflation, especially in heavily indebted oil-importing nations with weak currencies. With over 80% of global trade reliant on maritime transport, any persistent threat to strategic waterways affects not only energy prices but also shipping, insurance, and supply chains, turning a geopolitical crisis into direct pressure on living standards and the cost of essential goods across continents.
The question now is not only how the war will end, but what kind of global order will emerge from it — and who will lead it. For decades, the United States was considered the dominant political, military, and economic power, presenting itself as the chief guarantor of global stability and the guardian of the so-called rules-based order. In recent years, however, a series of unilateral decisions has begun to erode that image, raising growing questions about how far Washington itself abides by the rules it has long urged others to follow.
Since Donald Trump assumed office, the United States has taken steps viewed by many as a clear departure from multilateral norms: withdrawing from major international agreements, bypassing consultation with allies, and taking military and political decisions without explicit authorisation from multilateral institutions like the UN. These actions have not solely affected Washington’s rivals. Allies, too, have found themselves dealing with a strategic partner whose actions can be difficult to predict — and whose long-term commitments may no longer be taken for granted.
With the current war escalating to levels that threaten global energy and trade, these policies are now interpreted as even more consequential. Smaller and medium-sized nations reliant on international law and institutional balances are questioning whether the rules apply equally or shift according to a country’s position in the global hierarchy.
This perceived inequality in the application of international law is no longer theoretical; it shapes national positions within international organisations, prompting some states to form alternative alliances or pursue strategic independence. Military actions taken outside international consensus have also sparked ethical debate over the consideration of humanitarian and economic consequences, particularly when such decisions disrupt energy supplies or worsen living conditions for millions of civilians far from the frontlines.
Even with legal frameworks and institutions like the International Criminal Court, the ability to hold major powers accountable remains limited, widening the gap between stated principles and their practical application.
Consequently, global debate has moved beyond assessing war outcomes or economic losses. It now confronts a deeper question of global leadership legitimacy: Can the world continue to rely on a single power that makes unilateral decisions that affect all nations, or will repeated crises push the international system towards multipolarity, with other powers seeking to balance US influence and limit its ability to impose decisions without oversight?
The issue is no longer merely criticism of specific policies, but a question of the future of international legitimacy itself. If major powers continue to bypass the rules they established, other states will lose the incentive to comply, leaving the world with a system unable to enforce discipline or stability—a historical turning point marked by rising conflicts, declining trust, and increasing reliance on power as the primary means of resolving disputes.