The geography of the Iran-US confrontation has been predictable for the past 18 months; the Persian Gulf, the Strait of Hormuz, then the Red Sea. That map just got a great deal bigger. A new American attack on Iran could escalate "even further, to the Indian Ocean and, perhaps, beyond," said this week senior military adviser to Supreme Leader Ali Khamenei, and former commander of the Islamic Revolutionary Guard Corps, Yahya Rahim Safavi. It is a small sentence that packs a big punch, and deserves to be taken more seriously than the typical overblown rhetoric that spits out of the mouths of Iran officials during moments of crisis.

Safavi's composition was intentional. He drew a line from the Persian Gulf and Hormuz to the Red Sea, suggesting that the war's battle lines have already shifted once and may shift again. That's no mere speculation. The Red Sea route and its south end, the Bab el-Mandeb strait, have already seen months of Houthis attacks on commercial shipping and ship owners have been rerouting ships around the Cape of Good Hope for the past year at a great cost. What Safavi is indicating is that the game of pressuring choke points rather than going head to head might now be taken into open ocean waters, where Iran has little ability to project power but where the psychological and insurance impact of occasional attacks would be magnified by distance and numbers.

The Indian Ocean is a not a small sea. It spans about 70 million square kilometres, almost one-fifth of the earth's surface and is bordered by India, Pakistan, Iran and Bangladesh, where one-fifth of the world's energy and container traffic takes place. Not without relation, it is the location of the joint American-British base at Diego Garcia, which has been a base of operations and logistical support to US operations in the Middle East and South Asia for decades. For the Indian Ocean cannot only be named geographically but also as an implicit reference to American military infrastructure which is embedded within it, and a reminder that Washington's own assets are not limited to the Gulf.

The economic backdrop makes the warning land harder than a year ago. Under normal conditions, the Strait of Hormuz transports nearly one-fifth of the world's oil and gas by sea, and, at present, what little traffic is there has come to a virtual standstill. Shipping trackers quoted in a number of reports this week said that transits this weekend were just seventeen, compared to thirty-seven the previous week and an average of about one hundred and twenty-five pre-war.

The situation is not a reopening, but rather a "supervised pause" says maritime intelligence firms, every transit has to be coordinated with Iranian naval units. Before the escalation, the price of Brent crude was trading in the low 70s, but earlier this month the oil price spilled past the hundred dollar mark and found peaks above one hundred and nine dollars before settling around one hundred and two dollars. Goldman Sachs has cautioned that a continued squeeze on the Hormuz could push Brent prices above a hundred dollars through the remainder of the year, and as far as an outside possibility, a price of one hundred and twenty dollars a barrel.

That price movement is no abstraction for India, which imports more than 88 percent of its crude needs and has seen its own import basket more than double from about ninety dollars this August to over a hundred and two dollars this month. Not only would a broadened conflict increase shipping rates, it would affect the cost of war-risk insurance for all ships navigating through the region and delay shipping time, as well as make the price of shipping through the region more expensive for all the countries stretching from East Africa to Southeast Asia that rely on this route to the Middle East for trade. This is a reminder that the war isn't just costing the countries which fired the missiles.

A domestic political reason is also in play. Iran's Revolutionary Guard earlier this week stated it would change its military strategy and targets if it is provoked again and Tehran's negotiators have also been meeting with their U.S. counterparts in New York, on the sidelines of the UN General Assembly, where Tehran has presented conditions such as easing of sanctions and release of frozen assets.

Escalatory rhetoric and active diplomacy working side by side is not a contradiction it's an old Iranian negotiating trick to make its adversaries think twice about doing nothing while leaving a "face saving" route. In a speech at the same UN gathering, President Trump talked about considering a "deal" or taking "extremely tough action," a comment that did little to assuage markets already anticipating further strikes.

This is the first instance in 20 years of Iran threatening to disrupt its choke point in conjunction with a shipping volume drop that has been confirmed, and now an explicit reference to a theatre thousands of kilometres away from Iran's shores.