The conflict in the Middle East has entered its third week, and there is still no sign of de-escalation. In the meantime, every passing day only increases the cost to the global economy. Oil is hovering around $100 a barrel, disruptions to fertilizer supplies are fueling fears of a food crisis, and the paralysis of airports in Gulf countries is disrupting global air traffic.
The world's major economies are therefore attempting to contain the shock: the release of one-third of the strategic reserves of IEA member states, the easing of American sanctions on Russian oil...
The equation is now as follows: Western powers are doing everything to mitigate the impacts of the conflict, while Iran is doing everything to amplify them. For the Islamic Republic, the goal is to impose a high enough price to deter any future attack.
Short-term pain, long-term gain
The Trump administration, meanwhile, is trying to impose a different narrative: the war with Iran has negative consequences in the short term but will be beneficial in the long term. "It is short-term pain to achieve a much better situation," stated US Energy Secretary Chris Wright in an interview on ABC on Sunday.
In a report seen by Reuters, Peter Navarro estimates that neutralizing Iran could ultimately lower oil prices. According to the White House advisor, the presence of the Iranian regime induces a "terror premium" that adds 5 to 15 dollars to crude prices. The report says that the cumulative economic impact could even exceed 10,000 billion dollars over 25 years.
This logic is consistent with the Trump administration's rhetoric since the start of the conflict: it is necessary to tackle a regime today that, for decades, has been a source of instability for the entire Middle East, with global repercussions.
The argument is plausible. A stable and non-aggressive regime in Iran (even if not democratic) would benefit global energy security. Iran is not only a major oil producer (approximately 5 million barrels per day) but also has the capacity to paralyze transit through the Strait of Hormuz (approximately 20% of the world's oil). However, there is no guarantee that the war started by the United States and Israel will succeed in neutralizing this Iranian threat.
Time is on Iran's side
And Donald Trump likely risks running out of time to bring down the Iranian regime. Last week, a source close to the White House told Politico that the US administration believes that it has three to four weeks before the war becomes a real political problem.
Indeed, for Americans, this conflict translates very concretely into daily life through rising energy prices. On Monday, the average price of diesel exceeded 5 dollars per gallon for the first time since 2022. This comes as the midterm campaign is already well underway and "affordability" has emerged as the central theme.
Beyond politics, there are also the physical realities of the conflict. The United States is likely consuming years' worth of ammunition. In an article dated March 12, the Financial Times reported that the US has bought 322 Tomahawk missiles over the last 5 years. The Center for International and Strategic Studies estimates that 168 (over half) of these missiles were fired during the first 100 hours of the conflict.
And while US strikes have neutralized many leaders and significantly diminished its military capabilities, Iran still retains a strong capacity for nuisance. A few drones hitting Gulf capitals, tankers, or Western bases every day are enough to paralyze air and maritime traffic, as well as hydrocarbon production...
Ultimately, time is on Iran's side: the longer the war lasts, the higher the cost will be for Western countries. Last week, the Revolutionary Guard warned that the world should prepare for a 200-dollar barrel of oil. And while Donald Trump's objectives are not always very clear, Iran simply needs to hold on. In an article published yesterday entitled "Trump's Escalation Trap," Axios concluded: "To claim victory, the Iranian regime simply needs to survive."
