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How the World Is Forced to Fund the Iran War

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Paris (Imran Y. CHOUDHRY) :- Former Press Secretary to the President, Former Press Minister to the Embassy of Pakistan to France, Former MD, SRBC Mr. Qamar Bashir analysis : The most defining feature of the Iran War is not the missiles, the targets, or even the scale of destruction—it is the silent and systematic transfer of its cost to those who are not fighting it. In an extraordinary display of modern economic engineering, all three principal actors—Iran, United States, and Israel—have structured this conflict in a way that allows them to wage war without bearing its full financial burden. Instead, that burden is being shifted outward to global consumers, trade-dependent economies, and regional allies, transforming a regional conflict into a worldwide economic obligation.
This is what makes the Iran War fundamentally different from traditional wars. Historically, nations financed wars through taxation, borrowing, or internal sacrifice. Today, however, the interconnected nature of the global economy allows powerful states to externalize these costs. Oil prices rise, shipping costs surge, insurance premiums spike, and supply chains tighten—not as unintended consequences, but as embedded mechanisms through which the cost of war is distributed globally. The battlefield may be regional, but the bill is international.
At the center of this economic and strategic equation lies the Strait of Hormuz, the most critical energy chokepoint in the world. A significant portion of global oil, liquefied natural gas, and commercial goods passes through this narrow corridor every day. Control over this passage offers not only military leverage but also unparalleled economic influence.
Current estimates suggest that approximately $1.2 trillion worth of trade flows through Hormuz annually, including around $800 billion in energy shipments and $400 billion in non-energy goods such as fertilizers, chemicals, metals, and manufactured products. A 10 percent toll on this trade would generate roughly $120 billion per year. Such a mechanism would allow Iran, in theory, to recoup the economic damage of war within a single year—not through aid or borrowing, but by leveraging its geographic position within the global trade system.
This is where the economic dimension of the war becomes unmistakably clear. Any increase in shipping costs through Hormuz would be passed on to importing countries, raising energy prices, increasing transportation costs, and fueling inflation worldwide. Consumers in distant nations, far removed from the battlefield, would ultimately bear the financial burden. In effect, the Iran War would be funded not just by those involved, but by the entire global economy.
At the same time, the United States operates within its own system of cost distribution. With daily war expenditures estimated at around $1 billion, a conflict lasting 60 to 70 days would cost approximately $60 to $70 billion. However, much of the U.S. military presence in the region is sustained through security arrangements with Gulf states. These host nations, dependent on American protection, often absorb a significant share of these costs. Thus, the United States projects power while redistributing its financial burden to its allies.
Israel follows a similar model. Its wartime expenditures, estimated in the tens of billions, are largely offset through extensive financial and military support from the United States and allied networks. This support ensures that Israel can sustain prolonged military operations without bearing the full economic impact domestically. In this way, Israel also participates in the broader system of cost externalization.
The result is a striking and deeply troubling paradox. The nations directly engaged in the Iran War are not the ones paying for it. Instead, the financial burden is transferred to a diffuse and largely uninvolved global audience. Energy-importing countries, trade-dependent economies, and ordinary consumers all become indirect financiers of the conflict. The war, in effect, is globalized—not only in its consequences but in its funding.
In addition, the indirect cost transfer is already visible across continents. The biggest burden of the war is not military spending—it is the imported economic shock spreading through energy markets, shipping routes, inflation, and financial systems. Nearly one-fifth of the world’s oil passes through the Strait of Hormuz, and any disruption instantly translates into higher fuel prices, increased freight costs, and cascading inflation worldwide. Countries far removed from the battlefield are paying through rising grocery bills, higher transport costs, and tightening monetary conditions.
The Middle East itself is already absorbing heavy indirect costs. Countries not directly involved in the war are facing fuel price shocks, subsidy burdens, and logistical disruptions. Pakistan, for instance, has raised diesel prices by over 50 percent and petrol by more than 40 percent, while struggling to sustain subsidy programs. India is considering trade restrictions to stabilize domestic markets as energy and freight costs surge. Across the Gulf and surrounding regions, shipping disruptions, stranded vessels, and rising insurance premiums are increasing the cost of doing business, effectively turning the war into a regional economic tax.
Europe is experiencing the same phenomenon through a renewed energy and inflation crisis. Oil prices have surged above $100 per barrel, forcing governments to cap fuel margins, cut taxes, and release reserves to protect consumers. At the same time, inflationary pressure is pushing borrowing costs higher, affecting mortgages, business financing, and household stability. The war’s economic shock is thus embedded not only in fuel prices but in the broader financial architecture of European economies.
For Asia and Africa, the impact is even more severe. Many countries in these regions depend heavily on Middle Eastern energy and trade flows. The war is functioning as a direct economic tax, triggering shortages, subsidy crises, and potential social unrest. African economies, already vulnerable, face slower growth due to rising food, fuel, and fertilizer costs, with projections showing measurable GDP losses if the conflict persists. Across the developing world, the cost of the Iran War is not theoretical—it is immediate, tangible, and deeply destabilizing.
The implications of this model extend far beyond the current conflict. If wars can be structured in such a way that their costs are borne by others, the traditional economic constraints on warfare begin to disappear. This lowers the threshold for conflict and increases the risk of prolonged and repeated wars. The deterrent effect of financial burden—once a powerful force for restraint—is weakened when that burden can be shifted outward.
In the end, the most important question is not who is winning on the battlefield, but who is paying for the war. And the answer is increasingly evident: it is the world at large. Through rising energy prices, disrupted trade, and cascading economic effects, the cost of the Iran War is being distributed across borders and societies, often without acknowledgment or consent.
This is the hidden economy of modern warfare—a system in which power is exercised, destruction is inflicted, and the bill is quietly passed on to others. In such a system, victory is no longer defined solely by military success, but by the ability to fight without paying. And by that measure, the Iran War reveals a profound and unsettling truth: those who wage war have learned how to make the world fund it.

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Denmark says Russian warship fired flares at military helicopter

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Denmark has accused a Russian warship of firing two emergency flares at one of its helicopters while it was tracking the vessel in the Baltic Sea.

The Danish government has summoned the Russian ambassador over the incident, which it said happened during a “routine” monitoring operation on Monday.

Prime Minister Mette Frederiksen branded the Russian action “reckless” and said it was designed to “intimidate and divide”.

Russia said it would “thoroughly investigate” the incident but accused Danish helicopters of making “dangerous manoeuvres” near Russian warships.

It came on the same day that Nato forces shot down a drone over Lithuania in the latest security scare on the alliance’s eastern flank, where tensions remain high amid Russia’s full-scale invasion of Ukraine.

In a statement detailing the incident in the Baltic Sea, the Danish armed forces said: “One of the air force’s Fennec helicopters was today fired at with flares during a routine photographic operation of a Russian frigate, which was located in international waters off Gedser.”

Of the two flares fired at the helicopter, one passed close to it, the statement added.

The Danish foreign ministry described the incident as “completely unacceptable”.

Danish Foreign Minister Lars Lokke Rasmussen accused Russia of “gradually shifting the boundary for what they consider acceptable behaviour”, adding: “That is something we cannot accept.”

In a statement, Russian ambassador Vladimir Barbin said Moscow would “thoroughly investigate all the circumstances of the incident” but accused the Danish helicopter of carrying out “provocative actions”.

Barbin said this was “not the first time that Danish Air Force helicopters have carried out dangerous manoeuvres near Russian warships”.

He said he had complained about a similar incident last year, adding that the latest event showed that “communication problems lie not with the Russian Navy’s vessels, but with the Danish side”.

Russia’s behaviour was “reckless and dangerous,” the President of the European Commission Ursula von der Leyen said in a post on social media.

This incident – together with the drone over Lithuania – was “part of a broader pattern of Russian aggression and provocation against Europe”, she added.

Danish Defence Minister Jeppe Bruus told Reuters no attempt to make contact with helicopters had been made by the frigate’s crew.

Map of the Baltic Sea region showing Denmark, Lithuania, Poland and Russia. A marker indicates the location of a helicopter incident in international waters off Gedser, near Denmark's southern coast.

Overnight, Nato fighter pilots shot down a drone that entered Lithuania’s airspace.

Authorities said the drone likely entered southern Lithuania, near the second-largest city of Kaunas, from neighbouring Belarus shortly after midnight on Tuesday.

The origins of the drone have yet to be determined, the Lithuanian national crisis management centre said, but the country’s president pointed to increased Russian aggression in recent months.

President Gitanas Nausėda wrote on X: “With Russia intensifying its aggression against Ukraine, such readiness is vital for our region. Together with our Nato Allies, Lithuania will defend its airspace.”

Lithuania shares a large part of its southern and eastern border with Belarus, a key Russian ally.

Poland also announced there had been “aviation operations” in its airspace on Monday night “due to the activity of Russian Federation’s jet-powered unmanned aerial vehicles conducting strikes on Ukrainian territory”.

It said the overnight operations were of a “preventive nature” and aimed at “securing airspace and its protection, especially in areas adjacent to threatened regions”.

Nato jets have been scrambled several times to shoot down stray Ukrainian drones that have crossed into Baltic countries Estonia and Latvia this year.

Taken From BBC News

https://www.bbc.com/news/articles/cwn8mjl31p5yo

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Iran Checkmates the Hormuz Bypass

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Paris (Imran Y. CHOUDHRY) :- Former Press Secretary to the President, Former Press Minister to the Embassy of Pakistan to France, Former MD, SRBC Mr. Qamar Bashir analysis : The war with Iran is no longer merely a contest of missiles, aircraft and naval power. It has become a struggle over the arteries through which the world’s energy flows. For months, the United States, Israel and regional producers have searched for ways to reduce dependence on the Strait of Hormuz. Israel has proposed pipelines carrying Gulf energy westward to its Mediterranean ports, while other projects envisage moving Iraqi and regional oil toward the Mediterranean. But events of recent days demonstrate a fundamental weakness in this strategy: bypassing one vulnerable chokepoint does not abolish geography. It merely transfers the vulnerability somewhere else.
Israeli Prime Minister Benjamin Netanyahu made his vision explicit in March. He proposed oil and gas pipelines running westward across the Arabian Peninsula to Israeli Mediterranean ports, arguing that such infrastructure could eliminate dependence on maritime chokepoints.
The broader search for alternative corridors has also involved proposals linking Iraqi energy resources with Syria’s Mediterranean coast. These projects potentially create enormous commercial opportunities for transit countries, ports, construction companies and international energy corporations. The contest, therefore, is not simply over oil. It is increasingly over who will build, operate and influence the infrastructure carrying that oil.
Saudi Arabia already possessed the most important working example of the bypass strategy. Its 1,200-kilometre East-West Pipeline, or Petroline, carries crude from the kingdom’s eastern producing regions across the Arabian Peninsula to Yanbu on the Red Sea. As Hormuz became increasingly dangerous, this pipeline became enormously important. Roughly four million barrels per day were moving through the system, allowing Saudi Arabia to export without sending those barrels through Hormuz.
Then came the drones. Saudi authorities say several drones launched from Iraqi territory attacked the East-West Pipeline system in the Riyadh and Madinah regions. The attacks caused injuries and damage and forced authorities to shut the pipeline as a precaution while technical teams assessed its safety. The entire 1,200-kilometre pipeline did not need to be physically destroyed. A sophisticated energy artery depends upon pumping stations, controls and associated infrastructure. Damage at strategically important points can interrupt the entire flow.
The economic consequences could be enormous. Saudi Arabia reportedly has enough exportable crude stored at Yanbu to maintain current flows for only about five to seven days if Petroline remains closed. After that, as much as four percent of global oil supply could be jeopardised.
Repair estimates remain uncertain, ranging from days to weeks. The important strategic lesson is therefore not whether Petroline can eventually be repaired. Of course it can. The lesson is that the principal functioning escape route from Hormuz has itself demonstrated its vulnerability.
This is where Iran’s strategic depth becomes important. Tehran does not require conventional naval supremacy over every kilometre of Hormuz to exercise extraordinary leverage there. Commercial shipping operates according to risk. One successful missile or drone attack can force shipowners, insurers and cargo operators to reconsider whether a voyage remains commercially acceptable.
The same logic increasingly applies at the other end of the Arabian Peninsula. Yemen’s Iran-aligned Houthis have advanced along the Red Sea coast and reached Perim Island, situated inside Bab el-Mandeb—the narrow gateway connecting the Red Sea with the Gulf of Aden. Saudi Arabia’s Petroline may bypass Hormuz by terminating at Yanbu, but tankers sailing from the Red Sea toward Asian markets still confront the geography surrounding Bab el-Mandeb. The alternative route therefore possesses a chokepoint of its own.
This is what I describe as Iran’s strategic checkmate of the Hormuz-bypass concept. I do not use “checkmate” to mean that Iran possesses uncontested sovereignty over two international waterways or has defeated American military power. My argument is economic and strategic. Iran and forces aligned with it possess sufficient capabilities across different theatres to make alternative energy routes vulnerable. In commercial transportation, the ability credibly to threaten passage can sometimes be almost as consequential as physically occupying it.
The deeper story concerns money and power. Every new pipeline creates winners. Construction companies receive contracts. Energy corporations acquire projects. Transit countries collect revenues. Ports gain business. Investors obtain returns. Countries hosting terminals acquire additional strategic importance. Israel’s proposed Mediterranean corridor could enhance its position as an energy bridge. American companies participating in Middle Eastern energy and infrastructure projects can obtain major commercial opportunities. Regional governments, meanwhile, seek diversified routes that reduce their dependence on waterways vulnerable to war.
Yet the cruel paradox is that Middle Eastern oil-producing countries risk carrying a disproportionate share of the immediate damage. Their pipelines become targets. Their export terminals require protection. Their production revenues become vulnerable to interruption. Their cities face missile and drone threats, while insurance and transportation costs rise. Saudi Arabia’s present predicament illustrates the danger: an infrastructure system designed to provide strategic security from Hormuz has itself become exposed to the expanding battlefield.
The widening conflict around Bab el-Mandeb demonstrates another limitation of purely military calculations. A superpower can deploy aircraft carriers, destroyers, missile defences and tens of thousands of personnel, yet commercial shipping requires something more difficult to guarantee: confidence. A shipping company contemplating a billion-dollar vessel and valuable cargo does not ask merely which navy is stronger. It asks whether the ship can complete its voyage safely, whether insurance remains available and whether the potential profit justifies the possibility of catastrophic loss.
That is why geography continues to defeat attempts to declare Hormuz irrelevant. A pipeline across Saudi Arabia substitutes pumping stations and hundreds of kilometres of exposed infrastructure for the strait. A Syrian corridor would traverse another politically sensitive landscape. An Israeli Mediterranean corridor would require enormous investment, security and regional cooperation. And Red Sea exports must still confront the security environment surrounding Bab el-Mandeb. There is no magic line on a map capable of removing geopolitical risk.
The Iran war has consequently evolved into something much larger than the conflict with which it began. It is simultaneously a military confrontation, an energy war and a contest over the future architecture of global petroleum transportation. The question is no longer simply who produces Middle Eastern oil. Increasingly, it is who builds the pipelines, controls the ports, protects the waterways and possesses leverage between the wellhead and the consumer.
The architects of alternative corridors hoped to diminish Iran’s greatest geographical advantage by diminishing Hormuz itself. Instead, the expanding conflict is demonstrating that energy routes cannot simply escape geography. Close one chokepoint and another becomes indispensable. Build a pipeline and the pumping stations become strategic assets. Shift exports toward the Red Sea and Bab el-Mandeb assumes greater importance.
That is the strategic irony of this war. The attempt to make Hormuz irrelevant may instead have demonstrated just how difficult it is to make Iran’s geography irrelevant. The map of the Middle East has not changed. What has changed is the number of places on that map where the world’s energy lifelines can now be threatened.

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After Military Failure, Trump’s Economic War on Iran

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Paris (Imran Y. CHOUDHRY) :- Former Press Secretary to the President, Former Press Minister to the Embassy of Pakistan to France, Former MD, SRBC Mr. Qamar Bashir analysis : The geopolitical landscape has witnessed few spectacles as paradoxical as the recent confrontation between the coalition of the United States and Israel against the Islamic Republic of Iran. What was predicted by Western military analysts and policymakers to be a swift, decisive campaign—a “shock and awe” reminiscent of the opening salvos of the 2003 Iraq War—has instead morphed into a historical anomaly.

It is a conflict defined not by the victor’s triumph, but by the hubris of the aggressor being dashed upon the rocks of asymmetric resilience. The United States, the sole superpower possessing a military budget exceeding 1.5 Trillion annually—larger than the next 20 countries combined—has been forced into a humiliating strategic retreat.

After failing to achieve a single operational objective, the rhetoric has shifted from “military obliteration” to “economic annihilation.” This pivot from Tomahawks to Treasury sanctions is not a sign of strength; it is the death rattle of a failing hegemonic strategy, a threat as hollow as the bombs that failed to subdue Tehran.

In the lead-up to the conflict, the rhetoric emanating from Washington and Tel Aviv was characterized by a certainty that bordered on the biblical. Officials promised the “degradation of Iran’s military infrastructure to the Stone Age,” invoking imagery of an assault more severe and more comprehensive than the firebombing of Dresden or the atomic strikes on Hiroshima and Nagasaki.

After having failed to achieve even a single declared objective of waging war against Iran, the United States found itself in a position unique in its modern history: it had not lost a war tactically, but it had failed to win strategically. Iranian uranium enrichment, far from being halted, reportedly accelerated in response to the strikes, with the International Atomic Energy Agency (IAEA) confirming that stockpiles of 60% enriched uranium had risen by over 15% during the conflict window. The “daunting military machine” was halted not by Iranian nuclear parity, but by the cost of persistence.

This military failure has profound implications. For three decades, the United States has relied on the specter of its military supremacy to police the global order. The failure to bend Iran—a nation whose military budget is approximately $24.6 billion, a mere fraction of America’s—breaks the spell of invincibility.

It demonstrates that a nation-state can withstand the full kinetic might of the U.S. military if it possesses dispersed infrastructure, a decentralized command structure, and a popular willingness to absorb punishment.

Iran’s successful enforcement of maritime control over the Strait of Hormuz serves as a case study in asymmetric deterrence. Despite the presence of the U.S. Navy’s Fifth Fleet, which includes aircraft carriers and nuclear submarines, Iran’s swarm tactics of fast-attack craft and shore-based anti-ship ballistic missiles effectively checked U.S. freedom of navigation. The sight of Chinese oil tankers transiting the Strait under Iranian escort, unchallenged by the U.S. blockade, was a symbolic dagger in the heart of American naval supremacy.

Having failed on the kinetic battlefield, the United States has pivoted to the economic battlefield. The new executive order announced by the President promises “excruciating economic pain never seen before in the history of humankind.” This is a bold claim.

It is, however, a rhetorical escalation of a campaign that has been running since 1979. Iran has lived under some form of U.S. sanction for over four decades. The “Maximum Pressure” campaign initiated by the first Trump administration in 2018 aimed to drive Iranian oil exports to zero. While it succeeded in plunging exports to around 400,000 barrels per day (bpd) at its peak, it did not collapse the government.

Today, Iran has not only recovered but has adapted. Current estimates place Iranian oil exports at over 1.6 million bpd, with the vast majority flowing to China. The threat now is to extend “secondary sanctions” to any nation buying Iranian oil. However, the efficacy of this threat is undermined by the very structure of the global economy that the United States helped create: the petrodollar system.

The U.S. Treasury’s ability to sanction hinges on the centrality of the Dollar and the SWIFT messaging system. Yet, the infrastructure of evasion is now mature. Iran has spent 30 years perfecting the “black market” of oil. The system described by intelligence analysts—where proceeds never touch a direct Iranian account but are routed through third-party shell companies in Asia, often utilizing Chinese Yuan—has rendered the U.S. financial radar partially blind.

Furthermore, Iran’s strategic integration into the BRICS bloc (Brazil, Russia, India, China, South Africa, and new members like the UAE and Egypt) provides a lifeline. The BRICS New Development Bank and the Contingent Reserve Arrangement are actively working on a unified payment system—the “BRICS Pay”—designed to bypass SWIFT.

China’s Cross-Border Interbank Payment System (CIPS) has seen a 30% year-on-year increase in daily processing volume. When Iran sells oil to China and receives payment in Yuan via CIPS, the transaction bypasses the New York banking system entirely. The “weaponization” of the dollar has simply accelerated the global de-dollarization trend; central banks worldwide currently hold 58% of their reserves in USD, down from 71% two decades ago.

The domestic economic situation in the United States further undermines the credibility of this new sanctions regime. The President’s assertion of a “flourishing economy” rings hollow against the data. The U.S. national debt has surpassed $40 trillion—a staggering figure that is five times the federal government’s annual receipts of approximately $8 trillion.

The Congressional Budget Office (CBO) projects that interest payments on this debt will soon consume 20% of all federal spending, rivaling the defense budget. This fiscal fragility manifests in tangible economic pain: recent data revealed a loss of 27,000 jobs in a single month, and inflation, while moderating, remains above the Federal Reserve’s 2% target, exacerbated by supply chain disruptions caused by the war.

The collapse of Walmart’s stock—an 8% single-day drop that erased nearly $45 billion in market capitalization—is a bellwether. Walmart represents the American consumer base; its decline signals a shift from spending to saving, a precursor to recession. A nation drowning in debt and teetering on a consumer downturn lacks the economic oxygen to sustain a protracted global trade war against nations trading with Iran.

Finally, the geopolitical map renders this new sanction regime diplomatically unsustainable. The nations refusing to align with U.S. economic dictates represent over half of the world’s population.

China and India continue to buy Russian and Iranian energy because it is economically rational. Brazil, led by a leftist government, has no interest in enforcing American secondary sanctions against its own agricultural or industrial sectors.

The global South, observing the humanitarian catastrophe in Gaza and the reckless military gambit in Iran, views the U.S. not as a moral leader but as a destabilizing force. The threat to sanction any nation trading with Iran is an ultimatum the world is no longer willing to accept.

The era of the “American Century” ended not with a bang in the deserts of Iran, but with the realization that economic coercive power, like military power, is finite. The United States has failed to win the war; it is equally likely to fail in winning the peace. The pivot to “economic excruciation” is not a strategy for victory, but a coping mechanism for a superpower struggling to accept the limits of its own waning influence.

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