AhlulBayt News Agency (ABNA): When we assess the economic cost of the US war against Iran, oil tops the list. The International Energy Agency has described what happened as the largest disruption in oil supply in the history of the global market. To the extent that the cumulative reduction in supply by June exceeded 1.3 billion barrels. This crisis also prompted the International Energy Agency to coordinate an emergency drawdown of oil reserves. A volume more than double the amount of oil released after the start of the Ukraine war in 2022.
But Morgan Bazilian, director of the Payne Institute for Public Policy and former energy specialist at the World Bank, in an article in The Washington Post, believes that oil is only the first layer of a broader crisis. According to him, the war has shaken an interconnected chain of markets, from gas, helium, and chemical fertilizers to metals and precision industries. Many of these materials also lack strategic reserves that could be resorted to in the event of supply cuts.
On the other hand, Nadia Shadlow, a researcher, in an article in Foreign Affairs magazine, believes that erosion encompasses not only markets but also reveals the limitations of America's military model. A model that had long counted on short and decisive wars, while America's rivals now have greater capacity to turn confrontation into a long test of ammunition, industries, and political will.
Disruption in 6 Markets
Bazilian, in his article in The Washington Post, considers Qatar's Ras Laffan liquefied natural gas facility a small example of this entanglement. After Iranian missiles targeted two production lines of this facility in March, QatarEnergy predicted that exports of gas condensates would decrease by 24 percent, helium by 14 percent, liquefied gas by 13 percent, and naphtha and sulfur by 6 percent. Additionally, 17 percent of liquefied natural gas production capacity will also be lost.
The repair process may take between 3 to 5 years, and Doha has estimated the annual revenue loss from this situation at about 20 billion dollars.
According to Bazilian, the closure of the Strait of Hormuz and the disruption of Ras Laffan facility operations together have removed about one-fifth of the world's liquefied natural gas supply from the market. Unlike oil, gas transported by sea cannot be easily rerouted through pipelines. As a result, prices in Asia surged, and Japan and South Korea once again turned to increased reliance on coal. Thailand also increased its renewable energy targets and, for the first time, opened the way for the use of nuclear energy. A change that the country's energy minister directly linked to the US war against Iran.
This chain extends to materials that are less visible in news headlines. Helium is essential for MRI machines, the chip industry, and aviation, and unlike oil, it cannot be stored for long periods. Sulfur is also used in industries related to copper and silicon. Bazilian notes that the US Department of War needs these raw materials to rebuild radar systems that consume large amounts of copper.
Meanwhile, aluminum prices reached their highest level in four years after two of the largest smelting plants in the Persian Gulf region were targeted.
With propane prices surging, families in parts of South Asia and Africa once again turned from gas stoves to coal and open fires. At the same time, the price of urea, one of the most important fertilizers used for grains, increased from about $450 to about $700 per ton, and factories in India, Bangladesh, and Pakistan were forced to reduce or halt their production.
Erosion as a Weapon
Militarily as well, Foreign Affairs places the Iran war within the framework of a broader pattern of wars of attrition. Wars in which the side with greater technological superiority does not necessarily win, but rather the side that can compensate for its losses and, at the same time, impose heavy costs on the rival.
America and the Zionist regime's superiority in the conventional balance of power is significant, but Iran has spent several decades creating tools to compensate for this imbalance. Shadlow says that Iran's network of proxy forces in the region, alongside relatively cheap missiles and drones, forces America and the Zionist regime to consume expensive interceptor missiles and use their advanced ships and aircraft at a high rate.
In such an equation, Tehran does not need to match its rivals technologically. It is enough to continue rebuilding and renewing its tools and increase the cost of countering them.
Foreign Affairs explains that military power is not measured solely by the size of GDP or defense budget, but also by the ability to continuously convert these resources into ammunition, interceptor missiles, and war-ready systems. The Ukraine war had also previously shown that Western defense industries, designed for peacetime conditions, face difficulty in rapidly compensating for equipment that a long war consumes.
In Iran, this dilemma is repeated in another form. According to Foreign Affairs, America has been able to inflict significant damage on Iran's military capabilities and target the country's fortified nuclear facilities, but has not achieved a truly decisive result.
Military weakening of one side does not necessarily mean reaching an agreement. When the objectives of both sides are broad and retreat from them is difficult, the confrontation shifts from an effort to achieve a decisive result to a competition to measure which side can endure longer.
A War Beyond the Battlefield
Therefore, Foreign Affairs warns that Washington may find itself embroiled in a type of war it would prefer not to. From Shadlow's perspective, the danger is not that America lacks the ability to enter a war of attrition. Rather, it is that this country continues to structure and prepare itself based on the assumption that it will not have to experience such a war.
Energy prices and other economic consequences may also test this assumption before the battlefields clarify its fate. Even the economic pressure campaign against Iran requires political will that can bear its costs over time. Meanwhile, according to this magazine, the most realistic outcome could be the continuation of the confrontation for a long time, without achieving a clear and decisive result.
Bazilian concludes by taking the scope of these developments beyond Iran itself. The world energy system before the war was based on the assumption that the Strait of Hormuz would remain open and that energy and raw materials would be transported through this route at predictable and reliable times. But this assumption has now been cracked, and several countries are accordingly readjusting their energy sources and supply chains.
This author believes the lesson Washington should learn from this situation goes beyond the price of oil or the cost of war inside America. The world has become so interdependent that an attack on one facility can spread its consequences across continents, industries, and multiple markets.
According to him, the US war against Iran will eventually end one day, but its effects on the global economy may last longer than the war itself.
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