What if (God forbids) the Iranian-Israeli War Scenario ever materializes?

Some global geo-economic implications to consider.

American cost

America as of today is facing great challenges. A growing deficit; a struggling economy; high unemployment that is causing hardship for millions of American families; to name just a few. Iran if attacked will respond by bombing all oil refineries of the Gulf States. It will close the strait of Hormuz, which almost third of the world’s oil needs passes through. Consequentially, driving oil prices to astronomical prices, crippling any hope for an economic recovery for the U.S. and the world’s alike. The U.S. will also suffer greater backlash from the Muslim World. Iran will use this backlash against Americans and fund and facilitate greater terrorist attacks against American interests worldwide.

Arab cost

Arab governments will not be spared from this war either. Opted to host some of the American military bases, the Gulf States will be at the forefront in this conflict. Damage to its oil infrastructure will be enormous. Any perceived notion that these Sunni governments are aiding on destruction of a Shiite nation, it is bound to stir the emotions of the Shiite minority within these nations, leading to what is likely be a sectarian division among the population, and possibly armed conflict. The GCC countries now blinded and unable to navigate their way out of the mess created by war will lose trillions of dollars in the process.

Iranian cost

Iran will undoubtedly be the major loser. It will suffer great infrastructure damage, great number of deaths, and surely an even bigger damage to its political and economic structure that could lead to a complete collapse of the regime, similar to what we have seen in Iraq and Afghanistan. Since the battleground will be the Iranian soil, Iranian resistance and its conduct of the war will be similar to the Iraq War. Iranians will have to rebuild their country anew.

Israeli cost

Israeli officials announced on many occasions that the country has an unsettled score against Hezbollah and Syria. An Attack on Iran will start another front on the northern border of Israel, regardless of who will instigate it. The result of which is unpredictable. Under normal circumstances, other Arab countries wouldn’t get involved in war to rescue Hezbollah. If it involves the entire country of Lebanon and Syria, however, the stakes will be high and the governments will be under extreme pressure from their populations. They will find themselves either crumbling or involved in the conflict.

Roughly 2,500 years ago, Sun Tzu wisely observed, “For to win one hundred victories in one hundred battles is not the acme of skill. To subdue the enemy without fighting is the acme of skill.

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Written by

Ziad K. Abdelnour, Wall Street financier, trader and author is President & CEO of Blackhawk Partners, Inc., a private family office that backs accomplished operating executives in growing their businesses both organically and through acquisitions and trades physical commodities – mostly oil derivatives – throughout the world.