Oil, Missiles, and Diplomacy: The Global Stakes in the Iran–Israel Tensions

Struggle of power between Iran & Israel has played a major role in shaping the Middle East for decades. Their conflict runs deep, tied to political differences, religious tensions, & disputes over influence in the region. In recent years, things have become even more tense especially with Iran increasing its military presence in Syria. Israeli sources say that Iran now runs 13 military bases there, staffed by 5 divisions of the Islamic Revolutionary Guard Corps (IRGC).

Also, Iran has reportedly created a new proxy group called the Al-Hussein Division, focused solely on operations inside Syria. Israel sees these moves as a serious threat to its national security. In response, it has carried out several preemptive strikes on Iranian targets in Syria. One of the most significant attacks hit the Iranian consulate in Damascus, killing seven military officers, including three high-ranking commanders.

On 13^th April, Iran, along with allied groups from Iraq & the Houthi rebels in Yemen, launched a large-scale attack on Israel. The assault was massive, involving over 300 ballistic missiles, drones, & cruise missiles, which is a clear sign that Iran was taking a more aggressive stance in its long-running dispute with Israel.

After few days, on 18^th April, the Israeli forces hit back with a targeted strike on an air defense radar site in Isfahan, located deep inside Iran. This marked a turning point, showing that the conflict may now move into more direct and open confrontations between the two sides.

Broader Impacts on Iran-Israel Conflict

Impact on Economy – As soon as the conflict broke out, global financial markets reacted quickly & especially when it came to essential resources like oil & natural gas. That’s not too surprising, considering the Middle East produces around 31% of the world’s oil & nearly 18% natural gas.

Apart from the risk of disrupted supply chains, rising political tensions often make investors nervous. In these times, they usually move their money into safer bets like oil & gas. Because of this, since the conflict began on 13^th June, Brent crude oil prices have jumped by nearly 13%, but just after the attack by the U.S. on Iran’s nuclear infrastructure, it’s increased by 20%.

• • Humanitarian Consequences – Armed conflict between Iran & Israel, whether direct or through proxy groups like Hezbollah & Hamas, often leads to serious humanitarian fallout across the whole region.
  • Civilian Casualties & Displacement

    • According to the UN Office for the Coordination of Humanitarian Affairs (OCHA), the Israel-Gaza conflict in October 2023 alone caused over 33,000 Palestinian deaths, the majority of whom were civilians, including women & children. More than 75,000 people were injured, & 1.7 million were displaced within Gaza.
      

    • In Lebanon, conflict between Israel & Hezbollah have forced 100,000 of civilians from southern villages to flee further north, as reported by the Norwegian Refugee Council (NRC) in early 2024.

    • Infrastructure Damage – UN reports & satellite imagery confirm that repeated airstrikes have damaged or destroyed hospitals, schools, power plants, & water infrastructure in Gaza & parts of Lebanon.

    • Impact on Basic Services – In conflict-hit areas like Gaza, 97% of water is undrinkable, according to UNICEF & Power outages last over 18- 20 hours a day.

Iran-Israel: Global Diplomacy

The Iran-Israel conflict is more than a regional quarrel – it is a live chessboard where major powers are making calculated diplomatic & military moves.

Dual Strategy of U.S.

1. Support for Israel – By positioning Carrier Strike Groups in the Mediterranean & the Red Sea, the U.S. is signaling to Iran & its proxies that escalation will be met with overwhelming force. It has also integrated Israeli air defense with regional partners (e.g., Jordan, UAE) into a loose missile shield network, effectively building a regional anti-Iran security belt.
2. Nuclear Containment of Iran – Even while supporting Israel militarily, the U.S. avoids direct conflict with Iran to keep open diplomatic channels through backdoor negotiations in Oman & Vienna. Washington’s core objective remains preventing Iran from acquiring a nuclear weapons threshold, which would dramatically shift the region’s military balance.

China: Strategic Nonalignment with Quiet Leverage

• China gains by keeping the West entangled in the Middle East, diverting U.S. attention away from the Indo-Pacific.
• Its $400 billion strategic partnership deal with Iran which was signed in 2021, with oil-for-infrastructure swaps and that makes it a quiet but essential lifeline for Iran’s economy under sanctions. At the same time, China is one of Israel’s top trade partners in tech & infrastructure.
  

Russia’s Benefit from the Escalation

• Russia has relied heavily on Iranian drones (Shahed-131/136) in Ukraine & in return, is believed to have shared satellite intelligence & air defense systems.
• A wider Middle Eastern conflict pressures global energy markets, raising oil prices—a direct economic gain for Moscow under sanctions.
• Russia is also undermining U.S. credibility by opposing Security Council resolutions that favor Israel, thus repositioning itself as a counterweight to the West in the Global South.

Gulf States: Walking the Tightrope

• Saudi & UAE have normalized ties with Israel (formally or informally) but cannot afford to be seen as abandoning the Palestinian cause. Public opinion in the Arab world remains pro-Palestine.
• Militarily, Gulf states are investing in S. & Israeli tech (e.g., the Iron Dome, Barak missiles) while diplomatically endorsing China’s ‘de-escalation’ agenda in the region.
• Saudi Arabia is using its leverage over normalization talks to extract security guarantees & nuclear concessions from the U.S

Potential New Sanctions After the Ceasefire

After the ceasefire, Iran is not only continuing to face existing sanctions, but it could also be subjected to new or intensified sanctions depending on its actions in the post-ceasefire phase.

Support for Proxy Groups

• If Iran is found continuing support to Hezbollah, Hamas, Houthis, or Iraqi militias, the U.S. & allies could impose more targeted sanctions on Iranian military & intelligence entities.

Nuclear Escalation

• If Iran resumes or speeds up uranium enrichment or limits IAEA inspections, more nuclear-related sanctions could be enforced.
• There’s talk in the U.S. Congress of triggering the “snapback” mechanism under the Joint Comprehensive Plan of Action (JCPOA), which would reimpose UN sanctions.

Conclusion:

The ongoing conflict between Iran and Israel is no longer just a regional power struggle it’s a flashpoint that’s drawing in global players and reshaping alliances across the Middle East. What started as a proxy-based standoff has now escalated into direct military exchanges, raising the stakes for both countries and their allies. The consequences are already unfolding oil prices are surging, humanitarian crises are deepening, and tensions are spilling across borders.

Beyond the battlefield, this conflict has turned into a geopolitical chess game. The U.S. is trying to strike a delicate balance between supporting Israel and avoiding a direct clash with Iran. China and Russia are quietly expanding their influence, each playing their hand in a way that serves their long-term interests. Meanwhile, the Gulf states are walking a tightrope balancing security partnerships with public opinion and regional stability.

In the aftermath of the ceasefire, how Iran chooses to move forward whether by scaling back its regional influence or doubling down will shape not only its future but also the broader stability of the region. With the possibility of new sanctions, shifting alliances, and nuclear concerns resurfacing, the road ahead remains uncertain. What’s clear is that this isn’t just a local conflict anymore, it’s a test for the global order.