The world's energy markets have taken a breath of relief following a pledge by Donald Trump not to embark on any new military action against Iran before the American midterm elections on November 3. But developments in the Middle East indicate that Washington's diplomatic rhetoric has not significantly curbed the military dangers in the Middle East. Saudi infrastructure is still under threat from Houthis, Russia is looking to act as a mediator, while Pakistan and Turkey are under an uncomfortable defence burden and India's interests are growing more exposed.

It is a contradiction that is nothing short of remarkable. Washington touts "productive talk" and continues to place pressure on the military and increase sanctions. Tehran talks diplomacy, but also calls for easing economic restrictions. Saudi Arabia wants enhanced security assurances and Moscow is looking to boost its diplomatic reach.

The impact is immediate for international companies. Political decisions made thousands of kilometres away have become more and more important to price, shipping insurance, aviation security, industrial production and inflation.

Trump's announcement came after speculation regarding the possible American strikes prior to the elections. Washington was rumored to be preparing another escalation, after reports of ongoing military contingency planning. But the fact that operational readiness is achieved does not prove that a political decision is reached to attack.

The American president has a problem on his hands figuratively. The rising pumps prices pose a danger to household buying power, consumer confidence and the Republican party's chances of getting elected to office. Meanwhile, the fiscal and strategic costs of a protracted military conflict are significant. According to the Associated Press, 69% of Americans deemed the war as not being worth fighting.

This uncertainty is reflected in the energy market. Brent crude closed around $104–105 per barrel on Friday, according to the reports, which put the price at $104.72, about 2.4% up on the weekly charts. Geopolitical risk premium is estimated by Goldman Sachs at around $22 per barrel. These are indicative of traders not only setting prices for today's supply disruptions but the likelihood of more instability.

The annual import cost of crude to India may rise sharply depending on the volumes, exchange rates and refining margins if crude price goes up to $10.If the crude price surges by $10, the annual import cost to India can be large depending on volume, exchange rate, and refining margins. It also can increase transportation expenses, strain the rupee and make inflation management difficult.

But the biggest risk to Iran right now might be on the outside, however.

Saudi Arabia faces fresh Houthis attacks to energy infrastructure and airports. Amid reports of people dying at the airport in Riyadh and of threats to installations around Yanbu, concerns about the security of the kingdom's industrial and commercial plans have been raised.

The developments are important because Saudi Arabia is not just an oil exporter. It is relying on foreign investment, tourism, logistics, aviation, and large-scale infrastructure development for its economic diversification programme. So can repeated attacks lead to higher insurance costs, as well as deter investors and take resources away from Riyadh's security efforts.

Pakistan's Prime Minister Shehbaz Sharif has strongly condemned the Houthis' strikes and pledged solidarity with the kingdom of Saudi Arabia. However, diplomatic solidarity is much easier than military action.

The Saudi-Pakistan-Turkey defence arrangement, which reportedly is coming into an operational mode on 5 October, is a challenge for Islamabad and Ankara. Pakistan's economic ties with the Gulf States are vital and are trying to maintain diplomatic ties with Iran. Turkey also aims to assert itself in the region without risking another costly conflict.

Reports of any of the two countries' position as a clear turnaround should be taken with a grain of salt. It is not a unified commitment to provide defensive assistance, intelligence information, and direct combat. The extent of the deployment commitments Pakistan will need to make, and whether Turkey will join a wider conflict, should not be taken for granted.

Russia's involvement adds another dimension. President Vladimir Putin has extended his offer to help resolve the Iran conflict, and President Masoud Pezeshkian is holding meetings with Moscow. Russia has a seat at the table in Tehran, and a lot of experience with how to deal with Western sanctions. Whether it can convert that influence to a negotiated settlement is up for grabs.

For Moscow, mediation might give it some negotiating leverage in dealing with Washington and give it greater influence among nations that are looking for alternatives to the Western dominated security arrangements. But Russia's own conflict with Europe is a bet which reduces its credibility as a neutral broker.

Israel is in another predicament. Military officials reportedly have warned renewed hostilities with Iran could jeopardize the nation's election schedule. That's a possibility, not a definite postponement. The difference is significant because extended emergency operations might raise important issues of democratic accountability and political future of government.

In the meanwhile, India has embarked on a fresh strategic discussion with Elon Musk over Starlink. Musk has claimed that “powerful commercial interests” are hindering the competition of satellite internet services, while Communications Minister Jyotiraditya Scindia has denied any intention to safeguard a monopoly. The whole regulatory issue has become a political battle now, thanks to Rahul Gandhi.

India needs to safeguard national security, spectrum management, and fair competition (and not look ‘unfriendly’ to technology investment). While the possibilities of using Starlink in the field of remote connectivity are far from insignificant, foreign corporations will not be allowed to circumvent security measures on the grounds of commercial attractiveness.

The cost implications are far-reaching. The credibility of the regulatory authorities is a factor that impacts foreign investments, digital infrastructure development, and India's aspirations to emerge as a significant technology production and services hub.

In other parts of the world, internal conflicts add to the general unrest.

The unrest over public service and education funding is making a comeback in France. The clash between the Defence Minister Khawaja Asif and political parties in Khyber Pakhtunkhwa in Pakistan is an example of the widening gulf between Islamabad and Khyber Pakhtunkhwa opposition leaders. Hegseth has also drawn a rebuke from the Obama administration after criticizing it over the Fort Hood attack, which has also reignited a debate over national security and political responsibility.

The crises are not necessarily concurrent, and it would be presuming too much to have an international plan. Yet their economic impacts are now starting to overlap more and more.

It is strategic independence, with economic resilience which is the main condition in India. In an era of shifting alliances and allying with Mr. Nice, a diverse supply of energy, safe sea trade, competitive home industry and disciplined diplomacy are necessary.