Price of war

American supremacy was at its best when President Donald Trump took to Twitter to apprise Iran that should it retaliate in the wake of the airstrike near Baghdad Airport that killed its powerful military commander and touted number two — Qassem Soleimani — United States would hit them harder than before. In a condescending stance, the following tweet from the POTUS sounded like a full-scale warning before the cannons are loose. Trump tweeted saying, "The United States just spent Two Trillion Dollars on Military Equipment. We are the biggest and by far the BEST in the World! If Iran attacks an American Base, or any American, we will be sending some of that brand new beautiful equipment their way...and without hesitation!" The threat to deter from any retaliation fuelled by revenge on Iran's part was complete with Trump's tweet stating how the US has 52 Iranian sites of historic and cultural importance on its crosshair and that it will strike at an unprecedented pace. While Iranian Foreign Minister Mohammad Javad Zarif condemned Donal Trump for targetting cultural sites — stating it as a 'War Crime' — a strong US statement following the airstrike is likely to irk the Iranians even more. Soleimani's death has caused a stir in the region that is not particularly famous for peace in peacetime. With inter-regional agitations the flavour in the oil-rich Middle East, US action is likely to polarise countries into aligning either with or against it. Iraq — a close ally to Iran — has expectedly condemned the US drone strike, terming it as an attack on its sovereignty. It even called for an emergency Parliament session on Sunday in the wake of mounting pressure to expel standing American troops based in the country to aid in preventing any resurgence of the Islamic State. While Iran has visible disappointment hovering over it following the murder of its top military commander, it is Iraq who has a case of raising the sovereignty argument and sparring with the US on the international stage. With only time unveiling the next development, there are several implications of American aggressiveness that are likely to have a collateral bearing. Without any surprise, it is known that the oil-rich Middle East is the key to global energy requirements. With Saudi Arabia in American good books, it is hard to fathom them not helping the Americans in quelling Irani retaliation. However, it is not Saudi alone who holds a monopoly to the oil passages. Strict sanctions against Iran have been issued to ensure that the country has no buyers for its oil. With a specific aim to bring Iranian oil sale to a net-zero, Trump even revoked waivers given to importers of Iranian oil back in May last year. But, when it comes to backyard hustle, US may have to be increasingly reliant on Saudi since it is the Kingdom alone which shares a good length of boundary to the Strait of Hormuz alongside rivals Iran. Strait of Hormuz is perhaps the lynchpin here. With the tiny passage connecting the Persian Gulf to Gulf of Oman and the Arabian Sea, the Strait is responsible for passage to at least a quarter of global oil. Threat from America may prevent Iran from directly attacking it but it would not refrain them from destabilising order — affecting passage of oil from Strait of Hormuz. Should Iran resort to hurt the United States indirectly, Strait of Hormuz is a sitting target in sight. But at the same time, it has ramifications for Iran as well. So controlling Strait of Hormuz would mean putting Saudi on the backfoot, and implicitly getting back at the US too. Saudi, under such circumstances, inadvertently becomes a target.

Amidst the uproar and simmering conflict, oil and its passage are what affects the global order. Given Iranian capacity to control Strait of Hormuz, a direct impact on global oil prices is likely. It is here that all concerns lie and global interests rest. Resolving the Iran-US conflict is prima facie important for stability in the crude oil market. Already, the airstrike killing Soleimani hiked the prices by 4 per cent. Not far from ground zero of conflict is India whose interests are at stake. Apart from the expected impact of any war in the region and beyond, India has more to lose in this US-Iran conflict. Indian economy's precarious state puts it at severe risk should things escalate between the conflicting parties. High oil prices will hit Indian market causing further inflation in a period where analysts are already apprehensive of the same due to expensive food prices. The conflict will also impact a strong Indian diaspora residing in the region in two different spheres — security and remittances. The situation may arise for India to airlift its diaspora out of the war-zone — as it did in the 1990s when US-Iraq conflict saw India airlift more than 110,000 Indians. Further, a loss of a major share of remittances that India receives from West Asia which is a key source of foreign exchange. The dual impact of Oil prices and remittances would only deteriorate the recovering Indian economy. The US-Iran conflict, under such assumptions, becomes a recipe for disaster vis-à-vis India. It is, therefore, in the best interest of India to do everything possible in its capacity to ameliorate the situation. Initiating discussions, calling for de-escalation, et al, is necessary as India, under the discussed subjects, becomes a stakeholder in the conflict. And, not just India but the international community ought to step up and bring the conflicting parties to a table for peacetime agitation should never lead to cannons when it can be easily resolved through words.