Strike on Iran

America and Israel carried out a joint military operation against Iran — codenamed Operation Epic Fury (U.S.) and Operation Roaring Lion (Israel). The operation opened with a targeted strike on Supreme Leader Ali Khamenei, and it succeeded.

Iran responded on two fronts: it locked down the Strait of Hormuz, through which 20% of global oil supply is shipped, and launched missiles at neighboring Gulf states and their oil infrastructure. The fact that the Kurds are backed by the U.S. and Israel could fuel further escalation and spark chaos among ethnic minorities across the Middle East.

From an economic perspective, global oil demand is largely inelastic — meaning supply disruptions translate almost directly into price spikes. This could drag down global economic growth while fueling inflation, i.e. stagflation.

From a political perspective, Israel's aim is clear: eliminate the existential threat posed by Iran's regime. Prime Minister Benjamin Netanyahu has been eager to align with Washington on this front, and it became real. On the other hand, America's aim remains unclear: is it simply about degrading Iran's military capabilities, or a preemptive move to safeguard the petrodollar system from emerging cracks driven by China?