Khairul Faizi bin Ahmad Kamil, KMN
The ongoing conflict between Iran and Israel has emerged as one of the most significant geopolitical crises in the international system. This conflict is not merely a dispute between two countries but involves ideological dimensions, regional security, global energy interests, and the competition of major world powers. Recent developments indicate that this conflict has the potential to broadly impact global geopolitical and economic stability.
Hostilities Rooted Since the Iranian Revolution
The hostility between Iran and Israel dates back to the Iranian Revolution, when the new Iranian government reshaped its foreign policy by rejecting Israel’s existence and supporting the Palestinian cause. Since then, relations between the two countries have been marked by persistent tensions, often described as a “shadow war” through intelligence operations, cyber attacks, and proxy conflicts across several Middle Eastern countries.
The conflict has become more complex as Iran is alleged to support various armed groups in the region, such as Hezbollah in Lebanon and Hamas in Gaza. Israel views this support as a direct threat to its national security.
Escalation of Conflict and Regional War Risks
Recent developments show that the conflict has escalated into more overt military operations. Airstrikes on strategic targets in Iran and missile responses from Tehran indicate that the confrontation has moved beyond proxy warfare and is approaching direct confrontation between the two countries.
More concerningly, the conflict has the potential to spread to other countries in the Middle East. Lebanon is at risk of becoming a battleground if Hezbollah is directly involved. Syria could serve as an operational base due to the presence of Iranian forces, while Iraq is exposed to proxy conflicts due to pro-Iranian militias and U.S. military bases in the region.
Under such circumstances, the Middle East could transform into a multi-front conflict involving several countries simultaneously.
Major Powers in the Conflict
The Iran–Israel conflict also carries broader geopolitical dimensions involving major world powers:
- United States: traditionally Israel’s main ally.
- Russia: maintains strategic ties with Iran.
- China: holds significant economic interests in the Middle East, particularly in the energy sector.
This situation illustrates that the conflict could deepen global geopolitical polarization in an increasingly multipolar world. While most major powers aim to avoid a global war, a prolonged conflict could increase the risk of indirect confrontations between major power blocs.
Strategic Importance of the Strait of Hormuz
A critical element of this conflict is the Strait of Hormuz, a maritime passage connecting the Persian Gulf to the Arabian Sea. This route is one of the world’s most important energy chokepoints, as approximately 20% of global oil supplies pass through it.
If the conflict disrupts this route, it could trigger a global energy crisis. Experts warn that any significant disruption to oil facilities or trade routes in the region could sharply drive up oil prices and destabilize the global economy.
Impact on the Global Economy
Conflicts in the Middle East generally have a direct impact on the global economy, as the region is a major energy production hub. Geopolitical instability can cause oil prices to spike, subsequently increasing transportation, energy, and industrial production costs worldwide.
Furthermore, the conflict could disrupt international trade and global supply chains. Geopolitical uncertainty often raises logistics and raw material costs, putting pressure on industrial sectors across multiple countries.
Countries dependent on energy imports from the Middle East, such as China, India, Japan, and South Korea, are expected to be most affected if energy supplies are disrupted.
Implications for Developing Economies
For developing countries, such geopolitical conflicts can indirectly affect inflation, commodity prices, and financial market stability. Countries reliant on imported energy or raw materials may face increased production costs and fiscal pressure.
In Southeast Asia, disruptions to global trade could also affect exports and industrial supply chains. Global market instability may reduce export demand and impede economic growth.
Impact on Malaysia’s Economy
Although Malaysia is not directly involved in this conflict, the country remains exposed to indirect economic effects.
As a nation using a fuel subsidy system, petrol prices such as RON95 may not increase immediately, as they are regulated by the government. However, rising global oil prices can increase the government’s subsidy burden.
At the same time, Malaysia could benefit in some ways, as the country still produces oil and gas through Petroliam Nasional Berhad.
Overall, a prolonged conflict could put pressure on the cost of living for Malaysians through higher transportation and consumer goods prices.
Conclusion
The Iran–Israel conflict is not merely a regional dispute but a geopolitical crisis with wide-ranging implications for the international system. It could trigger a larger regional war, disrupt global energy stability, and place economic pressure on many countries, including Malaysia. In an interconnected world, tensions in one region can now impact global economic, political, and security conditions over the long term.
Although this conflict may not necessarily escalate into a world war, the risk of a broader regional war remains. If the conflict continues or involves more parties, it could destabilize geopolitics and accelerate shifts in the global power structure.
In an increasingly interconnected world, conflicts in a single region are no longer local; they can influence global economics, politics, and security over the long term.
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