Israel's military has moved to its highest state of readiness since 2019, its generals dusting off contingency plans last activated during the Aramco strikes that crippled Saudi Arabia's oil output. The trigger was a 30-minute phone call between President Donald Trump and Prime Minister Benjamin Netanyahu, a conversation described by Israeli Channel 12 as taking place "in the shadow of preparations for renewed fighting in Iran." What makes this alert different is not just the timing, but the target set: Iranian energy infrastructure. Refineries, pipelines, storage depots, the veins that keep Iran's economy pumping. This is not a surgical strike on a nuclear site. It is economic warfare, designed to collapse Tehran's cash flow and cripple its military machine at the same time. The message is clear: if Iran crosses a red line, Israel will not merely degrade its nuclear program. It will strangle its economy.
Why This Matters
This is not another skirmish in the shadow war between Israel and Iran. It is a potential inflection point that could redraw the geopolitical map of the Middle East and beyond. A direct strike on Iran's oil infrastructure would send oil prices surging past $120 a barrel, triggering inflation in import-dependent economies from India to Indonesia. It would also force a reckoning in Washington, where Trump's "America First" base is deeply divided over another Middle East war. For Beijing, already warning against military action, this would be a strategic nightmare, disrupting its energy imports from Iran and Saudi Arabia while pushing Gulf allies closer to the US. And for South Asia, it would mean a double shock: higher fuel bills and a refugee crisis as Iran retaliates against Gulf shipping lanes. The stakes are not just regional. They are global.
Background & Context
To understand the gravity of this moment, look back to June 7, 1981. On that day, Israeli jets bombed Iraq's Osirak nuclear reactor, crippling Saddam Hussein's nuclear ambitions before they could take shape. The strike was condemned worldwide, even by the US, which at the time opposed unilateral military action. Yet over time, the raid became a symbol of preventive defense, Israel's doctrine that enemies must never be allowed to acquire existential threats. Now, replace "Iraq" with "Iran," and the logic feels eerily similar. Israel's military brass, many of whom cut their teeth during the Osirak raid, see a parallel: Iran's nuclear program may be dormant today, but its conventional and proxy capabilities are expanding by the month. Hezbollah in Lebanon now has precision missiles. The Houthis in Yemen control territory just 20 miles from the Strait of Bab el-Mandeb. And Iran's energy sector, the lifeblood of its economy, is deeply integrated with its military. The National Iranian Oil Company funds the Islamic Revolutionary Guard Corps (IRGC). Hit the refineries, and you're also hitting the IRGC's budget.
The current crisis did not emerge overnight. It is the culmination of decades of escalation. In 2015, the Iran nuclear deal (JCPOA) was signed, offering Tehran sanctions relief in exchange for curbs on its nuclear program. Israel opposed the deal from the start, and in 2018, Trump withdrew the US, reimposing sanctions. Since then, Israel has launched hundreds of covert strikes against Iranian targets in Syria and Iraq, targeting arms shipments and military personnel. But this time, Israel wants explicit US backing, not just tacit approval. The Kan report cited by Israeli Channel 12 says Israel expects advance notice from Washington before any strike, a sign of lingering caution after the 2020 Suleimani strike backfired by uniting Iranians behind their government.
What Happened
The immediate trigger was a 30-minute phone call between Trump and Netanyahu, described by Israeli Channel 12 as taking place "in the shadow of preparations for renewed fighting in Iran." Public broadcaster Kan cited an unnamed security official saying Israel would join any new US strikes and, crucially, target Iranian energy infrastructure. That means refineries, pipelines, storage depots, the veins that keep Iran's economy pumping. It's a deliberate escalation, one that deliberately widens the battlefield beyond nuclear sites and military bases. The message is clear: if Iran crosses a red line, Israel wants the option to cripple Tehran's cash flow, not just its centrifuges.
But this is not just about Israel's ambitions. Trump, facing mounting pressure from Beijing to avoid another Middle East war, now finds himself pushed toward confrontation by his own hawkish advisers and a prime minister who has made Iran's removal a lifelong mission. Netanyahu, now in his sixth term, has spent years cultivating Trump's trust. He was the first foreign leader to endorse Trump's 2018 pullout from the Iran nuclear deal. During that same period, Israel launched hundreds of covert strikes against Iranian targets in Syria and Iraq. But this time, Israel wants explicit US backing, not just tacit approval. The Kan report says Israel expects advance notice from Washington before any strike, a sign of lingering caution after the 2020 Suleimani strike backfired by uniting Iranians behind their government.
The difference this time is the target set: energy infrastructure. That's a deliberate departure from the covert sabotage of recent years. Striking oil facilities is an act of economic warfare, one that could trigger oil price spikes, regional blackouts, and retaliatory attacks on Gulf shipping lanes. The Strait of Hormuz, already a pressure point during the 1980s Tanker War, could once again become a flashpoint. And it's not just about oil. Iran's energy sector is deeply integrated with its military. The National Iranian Oil Company funds the Islamic Revolutionary Guard Corps. Hit the refineries, and you're also hitting the IRGC's budget. That's why Israel's targeting strategy matters more than the weapons used. It's a signal to Iran's supreme leader, Ayatollah Khamenei, that Israel is no longer satisfied with playing whack-a-mole in Syria. It's willing to go for the jugular.
Global & Regional Reaction
The first public response came from China. Its foreign ministry warned repeatedly that military action "will only complicate the situation," a thinly veiled threat to both Washington and Tehran. Beijing's concern is not just about oil supplies, it's about the precedent. A US-Israel strike on Iran would signal that America is willing to use military force to reshape the Middle East, a region where China has invested heavily in infrastructure and energy deals. For Beijing, this is a strategic nightmare. It would disrupt its energy imports from Iran and Saudi Arabia while pushing Gulf allies closer to the US.
In Europe, reactions were muted but cautious. The EU's foreign policy chief, Josep Borrell, called for "maximum restraint" and warned that any escalation could have "unpredictable consequences." But there was no strong condemnation of Israel or the US, a sign of Europe's growing discomfort with Iran's regional behavior. Meanwhile, Russia's foreign ministry accused the US of "provoking instability" in the Middle East, a statement that masked Moscow's own strategic interests. Russia has deep ties with Iran, including military cooperation and energy deals, but it also benefits from higher oil prices, which a strike on Iran would likely trigger.
In the Gulf, reactions were divided. Saudi Arabia, which has long viewed Iran as an existential threat, has not publicly endorsed a strike. But it has quietly signaled its support for any US-led action that weakens Iran. The UAE, meanwhile, has called for dialogue, fearing that a strike could destabilize the region further. Qatar, which hosts the largest US military base in the region, has urged all parties to avoid escalation. The divisions within the Gulf Cooperation Council (GCC) reflect the broader uncertainty about how a strike would play out.
In Washington, Trump's hawkish advisers, including National Security Adviser John Bolton, have long advocated for regime change in Iran. But Trump himself has been ambivalent, campaigning on an "America First" platform that once included skepticism of endless wars. The question now is whether he will be swayed by the arguments of his advisers or by the warnings of his base, which is deeply divided over another Middle East conflict.
South Asia Impact
For South Asia, the stakes could not be higher. The region is home to 1.9 billion people, many of whom live in energy-import-dependent economies. India, the world's third-largest oil importer, would be hit hardest by a spike in oil prices. Its current account deficit would widen, inflation would rise, and its fragile fiscal situation would deteriorate further. Pakistan, already grappling with economic crisis, would face even higher fuel costs, deepening its reliance on IMF bailouts. Bangladesh, which imports 90% of its energy, would see its development goals derailed by rising fuel prices. And Sri Lanka, still recovering from its 2022 economic collapse, could face another balance-of-payments crisis.
The energy shock would not be limited to oil. Natural gas prices would also surge, hitting industries from fertilizers to textiles. India's fertilizer subsidies, already a fiscal burden, would balloon, while Pakistan's textile sector, a key export industry, would face higher production costs. The ripple effects would extend to food prices, as higher fuel costs drive up the cost of transportation and irrigation. In Bangladesh, where rice is a staple, food inflation could trigger social unrest.
But the impact would not be limited to economics. The region's security landscape could also shift. Iran's retaliation against Gulf shipping lanes could disrupt the Strait of Hormuz, the world's most critical oil chokepoint. A closure of the strait would cut off 20% of global oil supplies, sending prices soaring and forcing South Asian economies to ration fuel. Meanwhile, Iran's proxies in the region, Hezbollah in Lebanon, the Houthis in Yemen, could launch attacks on Gulf shipping, further destabilizing the region. For South Asia, already grappling with climate disasters and economic fragility, the fallout could be catastrophic.
Public sentiment in the region would also shift. In Pakistan, where anti-American sentiment is already high, a US-Israel strike on Iran could fuel protests and anti-Western sentiment. In India, where the government has maintained a delicate balance between its strategic partnership with the US and its energy ties with Iran, the crisis could force a reckoning. And in Bangladesh, where the government has sought to maintain neutrality, the economic shock could erode public trust in its leadership.
What Happens Next
Analysts expect the next 48 to 72 hours to be critical. If Trump and Netanyahu finalize their plans, Israel could launch airstrikes within a week, targeting Iran's oil infrastructure in a coordinated campaign with the US. The most likely scenario is a phased strike, beginning with precision attacks on refineries and pipelines, followed by broader strikes if Iran retaliates. But the risks are immense. Iran has vowed to respond asymmetrically, using its proxies in Lebanon, Yemen, and Iraq to launch attacks on Gulf shipping and US bases. The IRGC could also target Israeli and US assets in the region, including in Iraq and Syria.
A key question is whether China and Russia would intervene to protect Iran. Beijing has already warned against military action, but it is unlikely to take direct steps to prevent a strike. Russia, meanwhile, has a more complex calculus. It benefits from higher oil prices, but it also has deep military and energy ties with Iran. The most likely outcome is that Moscow and Beijing would limit their response to diplomatic pressure, while privately signaling their displeasure to Washington.
In South Asia, the most immediate impact would be economic. Oil prices could spike to $120 a barrel within days, triggering inflation and fiscal strain. Governments would likely respond with fuel subsidies and rationing, but the economic damage would already be done. The longer-term impact would depend on how Iran retaliates. If it targets Gulf shipping lanes, the Strait of Hormuz could close, cutting off 20% of global oil supplies. This would force South Asian economies to diversify their energy sources, potentially accelerating their shift toward Russian and Central Asian oil. But the transition would be painful, with higher costs and supply disruptions.
Diplomatically, the crisis could force South Asian governments to take sides. India, which has maintained a delicate balance between its strategic partnership with the US and its energy ties with Iran, could face a reckoning. Pakistan, already aligned with China and Iran, could deepen its ties with Tehran, further straining its relations with Washington. And Bangladesh, which has sought to maintain neutrality, could find itself drawn into the crisis, either as a mediator or as a victim of the economic fallout.
The most likely outcome is a prolonged period of instability. Even if the strikes are limited, the economic and security fallout would be severe. The region's energy lifelines would be disrupted, its economies would suffer, and its governments would face mounting pressure from their publics. The crisis could also accelerate the shift toward multipolarity in the Middle East, with China and Russia playing a more prominent role in mediating the fallout. But for South Asia, the immediate priority would be damage control, managing the economic shock, securing alternative energy sources, and preventing the crisis from spiraling into a wider conflict.
Related Coverage
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Key Takeaways
- Israel's targeting of Iran's energy infrastructure signals a deliberate shift from covert sabotage to economic warfare, risking a global oil price shock that would hit South Asia hardest.
- South Asia's energy-import-dependent economies, India, Pakistan, Bangladesh, face severe economic strain from higher fuel costs, inflation, and potential supply disruptions in the Strait of Hormuz.
- The crisis could redraw the Gulf's security map, accelerating a multipolar shift as China and Russia play a more prominent role in mediating the fallout, while forcing South Asian governments to take sides.
