The recent events across the Middle East, Eastern Europe and South Asia paint a disturbing picture in which military conflicts are impacting energy prices, international trade, defence budgets and foreign relations. The factors that influence Iran, Israel's security threats, the threat to Saudi oil installations, Russia's ongoing Ukraine war and China's expanding strategic influence are no longer geopolitical issues isolated from one another. These pressures are interdependent and further cloud an already uncertain global economy.

The key factor in this standoff between Trump and Netanyahu is the U.S.-Israel alliance.The issue at the heart of the clash between Trump and Netanyahu is the alliance between the United States and Israel. Any negotiations between Washington and Jerusalem about Iran have implications beyond Israel security. The underlying issue is whether the U.S. will exert more pressure on Iran through diplomatic and military means or whether the two governments are talking about a more direct engagement with Tehran.

The preparedness of a military force is different from the decision to go to war. Greater deployments, intelligence coordination and firmer political admonitions can all be tools of coercive diplomacy. These are not in themselves a proof of authorisation of an operation.

The issue for Iran is no different. Tehran has to prove its strategic influence without sparking clash with its rivals that may further plunge the nation into economic crisis. It has already been limited in its economic options by sanctions, limited access to international finance, inflationary pressures and reliance on oil income. If the conflict spread, it would bring further pressures on investment, trade and domestic stability.

Saudi Arabia has another, but no less important, issue. The ongoing attack by Houthis with missiles and drones shows the potential power of relatively cheap arms in attacking billions of dollars of infrastructure. Oil-processing plants, export terminals, pipelines and shipping lanes are especially vulnerable targets since even a short-term disruption could affect international energy markets.

This is evident when looking at the value of Saudi Arabia's place in international petroleum markets. The kingdom has crude production capacity of more than 12 million bpd and is one of the world's key providers of spare oil capacity. It has an influence over market expectations because it increases or maintains supply during international emergencies.

If a sustained disruption occurs, even on a smaller scale, say one million barrels per day, this would take about 30 million barrels out of potential monthly supply. The actual price effects would vary with inventories and alternative production, as well as with the conditions of demand and with the length of the interruption.

The Houthis also block commercial shipping near the Bab el-Mandeb Strait, an important shipping route connecting the Red Sea and the Gulf of Aden. Shipping firms in danger of security issues are likely to redirect ships around southern Africa, adding to the time on voyages, fuel usage and insurance costs. These expenses are borne by the importers, exporters and consumers in the long run.

Questions about components of missiles flown in by Chinese must be taken with a grain of salt. If commercial electronics or dual-use parts are found to be of Chinese origin, it does not automatically lead to direct authorisation by Beijing. To prove the responsibility, details about the procurement chain, intermediaries, export control and the final recipient of the equipment are essential.

However, as more and more of these parts are available commercially for advanced weapons, it poses international security concerns. Export restrictions can only be as effective as the measures taken to stop diversion via third countries.

Qatar has good reason to be worried about regional spirals. Doha is also a key player in international diplomacy, and a significant exporter of LNG. Qatar's LNG export capacity has been about 77 million tonnes a year, and there are significant plans to expand capacity. A disruption to energy transportation in the Gulf would therefore have an impact on the gas markets in Asia and Europe.

Another dimension is added due to the internal instability in Pakistan. The political uncertainty in Khyber Pakhtunkhwa in the wake of Sohail Afridi's interrogation must be looked at in the context of long-time security issues, militant violence and issues between the provincial and federal governments in the province. Allegations regarding detention or abduction which are not verified should not be accepted as facts.

The economic impact of continued turmoil for Islamabad could be devastating. External finance, multilateral assistance and consistent fiscal reforms are necessary for Pakistan. Uncertainty of security keeps investors from investing in private enterprises, makes infrastructure more difficult to build and raises the burden on government spending.

Russia's ongoing missile and drone attacks against Ukraine, meanwhile, are a testament to the economic aspect of a new type of conflict. In addition to the loss of immediate physical assets, attacks on power generation, industry and transportation systems impose massive reconstruction costs. According to the World Bank assessment from February 2025, the reconstruction and recovery costs for Ukraine could reach as high as $524 billion in the next 10 years. Subsequent destruction adds to the challenge.

An issue that also comes to mind is a more fundamental question about military dependence on privately controlled technology, specifically Ukraine's use of satellite communications, such as Starlink. Today, communications networks for battlefield coordination, emergency services and civil communications are vital assets to be strategically employed. Issues of access, continuity and contractual control thus have national security consequences.

These developments were all of interest to India. International agreement about mobility with Russia may provide opportunities to skilled labour and employers, but economic aspects of the arrangements will depend on the final terms of the agreement, its implementation and labour protection.

For the larger strategic question for New Delhi it is how to keep its relationship productive with the other big powers vying for influence. Minister for External Affairs, S. Jaishankar's differentiation between India's relationship with Washington and Beijing is a practical reality, as economic cooperation with the United States and managing geopolitical rivalry with China are bound to have different considerations.

India's merchandise imports totalled USD 700 billion in FY2024-25, reflecting the country's reliance on the global supply chain and commodity prices. An increase in crude prices will impact the import bill, transportation expenses, inflation and the current account. Extended shipping disruptions also pose a risk to exporters in the form of increased shipping prices and shipping timetables.

Geopolitical stability is then for Indian companies not a mere diplomatic goal. It affects borrowing rates, competitiveness of manufacturing industry, export margins, and investment decisions.

The big lesson is that the two dimensions of security economic and military are now one. The United States has vast military and financial power, China is the main center of world manufacturing, Russia has significant energy and strategic assets, and the Gulf is the source of international petroleum supplies.

The pressure to narrow down India's foreign policy to geopolitical camps is something that the country must withstand. It is more conducive to its interests to pursue strategic autonomy, diversify energy sources, boost domestic manufacturing, and maintain diplomatic outreach and engagement.