The United States is recklessly spreading economic havoc among global friends and foes while suffering little harm itself, according to an analysis of the ongoing war in Iran. The conflict, triggered by US and Israeli bombardments, has disrupted energy markets worldwide, with Asian economies bearing the brunt of the crisis.
To shield ordinary Indians from the war in Iran, the government in Delhi redirected supplies of liquefied gas to households, limiting supplies to the plastics industry. Nepal rationed gas, the Philippines trimmed the government workweek to four days, and Bangladesh closed universities and rationed fuel. These measures were a direct response to Iran’s closure of the Strait of Hormuz, through which about 80% of oil and oil products destined for Asia transited in 2025, according to the International Energy Agency. Traffic through the strait has collapsed by 90%.
Europe, less reliant on Middle Eastern fuel, has still been hit hard by surging natural gas prices. By 20 March, the MSCI index of European stocks had fallen about 11% since the start of the war, compared with a 9% fall in the MSCI Asia index. The US economy, however, has shown remarkable resilience, with the S&P 500 losing only 5% over the same period. This is largely due to America’s abundance of domestic natural gas, which satisfies about 36% of its energy needs.
The data underscores a shift in the US role from a guardian of a rules-based global order to an arbiter of chaos, spreading economic harm while remaining relatively insulated. The barrage of tariffs launched by President Trump in April 2025, the first volley of a new American campaign against the world, has also taken a toll. According to the International Monetary Fund, US GDP growth is forecast at 2.4% this year, up from earlier projections, while growth prospects for Britain, Japan, Canada, India, the euro area and Latin America have all weakened since Trump took office.
The World Trade Organization warns of further pain. If energy prices remain high, merchandise trade growth will slow from 1.9% to 1.5%, with European exports shrinking by 0.6%. GDP growth in Asia would slow to 3.1% from 3.9%, while Europe’s expansion would nearly halt at 0.4%. Beyond growth, the war disrupts essential supplies: about 70% of Brazil’s and 40% of India’s urea imports come through the Strait of Hormuz, and Gulf nations import most of their food via the same route. Countries like Bangladesh, India and Pakistan also face a drop in remittances from millions of workers in Gulf countries as the regional economy suffers.
