Following a period of immense geopolitical turmoil, an unprecedented conflict between the United States, Israel, and Iran erupted in late February 2026 as a result of failed diplomatic efforts and spiking tensions. Iran and Israel had repeatedly exchanged missile strikes in 2024, while the U.S. had launched airstrikes against Iran in the Twelve-Day War in June 2025. Domestically, Iran underwent mass political upheaval during the largest protests since the 1979 Iranian Revolution, coupled with Iranian security forces killing upwards of tens of thousands of protestors. In response, U.S. President Donald Trump threatened military action against Iran while beginning to mobilize the largest U.S. military buildup in the region since the 2003 Iraqi invasion.
In mid-February, the U.S. and Iran began a new round of nuclear negotiations that proved to be fruitless, as both parties refused to make concessions. There was simply no sign of a breakthrough that could avert the impending U.S. offensive. On February 28, U.S. and Israeli forces launched a series of coordinated airstrikes targeting Iranian military and nuclear-related facilities. Officials from both countries described the attacks as a preemptive initiative to limit Iran’s military capabilities, but the operation has only escalated conflicts in the region.
Shortly after the initial strikes, Iran’s Supreme Leader Ali Khamenei, along with several other high-ranking Iranian officials, was reported killed in the targeted attacks, eliminating any remaining possibility of de-escalation through diplomacy. While many attacks targeted military bases and various government facilities, airstrikes damaged schools, hospitals, and cultural heritage sites as well. In response, Iran launched hundreds of drones and ballistic missiles at Israeli targets as well as a plethora of U.S. military bases, ranging from Bahrain and Jordan to Saudi Arabia and the United Arab Emirates, marking rapidly growing escalations in conflict.
In late March, Iran further escalated the conflict, threatening to bomb and destroy the desalination plants, among other infrastructure, in surrounding countries. These plants serve as the sole water source for over 90 million people living in the Middle East. However, on March 30th, Trump retaliated by making parallel threats to Iran, including “blowing up completely obliterating all of their Electric Generating Plants, Oil Wells and Kharg Island (and possibly all desalinization plants!).” These developments have brought a sense of uncertainty, as the line between humane and universally outlawed gets blurrier on both sides.
Aside from the warfare and threats, economically, the war has been described as the world’s largest supply disruption since the 1970s energy crisis, marked by surges in oil and gas prices, disruptions to aviation and tourism, and financial market volatility. These issues have stemmed predominantly from Iran’s closure of the Strait of Hormuz, responsible for transporting roughly 20-25% of the world’s seaborne oil and 20% of global liquefied natural gas, and Israel/Iran attacks on energy facilities. On March 19, the cost of the war to the U.S. military was estimated at $18 billion, with the Pentagon requesting an additional $200 billion for the war efforts.
One country bearing the brunt of the price increases is the Philippines, whose president declared a national energy emergency on March 24th. In just over a month, gas prices have increased by 50%, and diesel has doubled, forcing the country to implement limits on everyday energy consumption, such as air conditioning and travel. Additionally, the increased prices have “reset” the political effects on Philippine trade, as they have reopened trade with Russia and Japan to compensate for the dramatic loss of supply. Other Southeast Asian countries face similar issues, such as Cambodia, Vietnam, and Laos, which have implemented policies such as shortened school weeks, reduced fuel taxes, and encouragement of working from home to address the constant demand for oil.
Outside of Southeast Asia, the US economy has also taken hits from the war. Much like other countries, gas prices have skyrocketed, averaging $4.09 per gallon across the country (as of 4/3/26), a 33% rise, marking the highest prices since August 2022. Unfortunately, the increasing prices show no signs of slowing down, rising multiple cents each day. As a result of more expensive transportation, shipping prices have also increased with fuel surcharges. A third major economic effect has been on the housing market. Over the past five weeks, mortgage rates have steadily increased to over 6.5% for a thirty-year fixed rate, 0.5% greater than in February 2026. Lastly, although the central bank has remained neutral whilst evaluating the war, many economists predict that it will also affect borrowing costs, lowering interest rates; however, others disagree, noting that concerns over inflation may prolong the impact on interest rates beyond 2026.
The trajectory of the conflict and the Hormuz Strait blockage remain uncertain, even as cease-fire negotiations have begun. The broader war serves as a stark reminder of the fragility of international stability and the urgent need for renewed diplomatic efforts. Without a push for de-escalation, the long-term consequences, both human and economic, may prove even more catastrophic than those already witnessed.