Renewed US-Iran hostilities and Israel’s continuing military campaigns reflect rising risks of a wider conflict in the Middle East and elevated energy and food crises internationally.
THE United States and Iran traded new attacks overnight into Thursday, heralding lethal exchanges that threaten the collapse of their agreement to end the war. According to President Trump, the ceasefire between the US, Israel and Iran is “over.”
The hostilities in the Gulf are a major negative force in the Philippines. Since the country relies on the Middle East for over 90 percent of its oil, the fighting in and the closure of the Strait of Hormuz have crippled Manila’s primary energy supply lines, sending inflation past 7 percent.
Amplified by the brewing super El Niño, soaring inflation has triggered record-high retail prices for diesel and gasoline, straining household purchasing power.
A broader Middle East conflict would put the lives and economic stability of millions of overseas Filipino workers (OFWs) in the region at risk, directly threatening vital household remittances.
No longer a bilateral confrontation
The renewed confrontation has expanded beyond the bilateral US-Iran relationship.
It now intersects with Israel’s continuing military operations, the Gaza genocide, ethnic cleansing in the West Bank, lethal tensions in Lebanon, persistent unease in Syria, Jordanian balancing between adversaries, Iraqi efforts to avoid being dragged into an economic abyss, the Gulf states’ disrupted security and broader regional security rivalries.
Rather than isolated crises, these theaters increasingly form an interconnected strategic landscape in which developments in one arena quickly reverberate across others.
Israeli Prime Minister Netanyahu needs strategic tension prior to the fall election.
Israel’s continuing campaign
Israeli leaders argue that previous operations significantly degraded Iran’s military capabilities while emphasizing that continued vigilance remains necessary to prevent their reconstruction. Read: they want the Obliteration Doctrine to finish the job.
This declared policy extends beyond Iran itself. Israeli operations have continued in Gaza, southern Lebanon and, periodically, Syria, reflecting a security doctrine that sees these fronts as strategically interconnected rather than separate conflicts.
Rather than viewing Gaza, Lebanon and Iran independently, Israeli strategic planning increasingly treats them as components of a single security environment.
The conflicts stretching from Gaza to Iran increasingly resemble a single regional security system rather than discrete wars.
One regional theater, not separate wars
In Gaza, military operations continue amid an ongoing humanitarian crisis. But neither Palestinian genocide nor the West Bank’s settler violence and ethnic cleansing is any longer considered newsworthy.
Along Israel’s northern frontier, exchanges with Hezbollah and operations in southern Lebanon remain volatile. Meanwhile, Israeli mass atrocities and bombardments have displaced over 20 percent of Lebanon’s population.
Yet, Gaza and Lebanon are barely reported in Western media any longer. When mass atrocities become a daily staple, they’re no longer news.
Syria continues to serve as a theater for strikes targeting military infrastructure associated with Iran and allied groups, with Israel’s incursions into the Quneitra and Deraa provinces, presumably to search for civilians.
Caught in the crosshairs, Jordan is scrambling to intercept hundreds of missiles and drones aimed at US and Israeli targets.
As bases housing US troops in Iraq are frequently targeted by Iranian-aligned non-state militias, Iraqi officials can only condemn US strikes on Iraqi soil as a violation of its sovereignty.
Local citizens bear the brunt of violence. Strategic costs of escalation
This regionalization also alters strategic calculations. States increasingly evaluate military operations not solely in terms of local objectives but also their implications for deterrence across the wider Middle East.
Paradoxically, escalation risks, which should be reduced and marginalized, have become cumulative rather than isolated — which means that they are being amplified and compounded.
The consequence is a conflict system whose boundaries continue to expand geographically while becoming progressively more difficult to contain.
The consequences of renewed hostilities extend well beyond the battlefield. Military expenditures rise as regional governments devote additional resources to missile defense, intelligence, naval deployments and force readiness.
These expenditures compete with (and over time, crowd out) longer-term investments in infrastructure, education and economic diversification.
Economic costs of energy shock, food security
The Middle East remains central to global energy markets, maritime commerce and international investment flows. Consequently, even limited disruptions around the Persian Gulf and Strait of Hormuz influence shipping costs, insurance premiums and commodity prices.
Unlike previous regional crises, the current conflict directly involves the world’s principal energy chokepoint — the Strait of Hormuz — through which one-fifth of globally traded crude oil and a significant share of liquefied natural gas (LNG) exports transit.
Even absent a sustained closure, heightened military risks can raise insurance costs, reroute shipping and increase market volatility.
Under a contained conflict scenario, crude oil prices could remain in the $85–100 per barrel range.
A prolonged disruption to Gulf shipping or energy infrastructure could push prices toward $110–140.
An extreme scenario involving significant interruption of Hormuz traffic could temporarily drive prices above $150, even if strategic reserves moderate the shock.
Natural gas markets — especially in Europe and Asia — would experience parallel upward pressure through LNG supply constraints and higher transport costs.
Heaviest burden in Global South
The implications extend far beyond energy. Higher fuel prices increase fertilizer production costs, transportation expenses and irrigation costs, placing additional pressure on global food systems.
Low-income food-importing countries in North Africa, Sub-Saharan Africa and parts of Asia would face renewed import inflation, deteriorating balance-of-payments positions and heightened fiscal stress.
Countries already affected by conflict, drought or debt distress would be especially vulnerable. Such indirect consequences often persist long after military operations themselves have subsided.
In Southeast Asia, the Philippines is a case in point. The longer the amplified effects of the energy and food security crises linger, the greater the adverse headwinds in the country, as exemplified by drastic growth deceleration.
Worse, these effects are likely to be amplified by the rainy season and periodic typhoons, systemic flooding in urban hubs, coupled with the simmering flood control corruption debacle, selective justice, shows of political persecution and rising geopolitical risks.
Dr. Dan Steinbock is an internationally recognized strategist of the multipolar world and the founder of Difference Group. He has served at the India, China and America Institute (USA), Shanghai Institutes for International Studies (China) and EU Center (Singapore). He is also the author of “The Fall of Israel” and “The Obliteration Doctrine.” For more, see https://www.differencegroup.net
This is an abbreviated, Philippines-focused version of the original commentary published by the Informed Comment (US) on July 10, 2026.
