After a brief lull, tensions in the Middle East have flared up once again, fueled by the US's escalated military strikes against Iran that commenced last Saturday (July 11). In retaliation, Iran launched attacks on US installations and ammunition depots in Kuwait, Qatar, Bahrain and Jordan. While civilian casualties remain minimal on both sides, Iranian infrastructure has sustained significant damage. Both nations are now trading accusations of ceasefire violations.
On June 17th, a Memorandum of Understanding (MOU) was signed between Iran and the US following 40 days of US-Israeli airstrikes aimed at halting hostilities and initiating peace talks. One of the primary conditions of the MOU was to cease fighting, yet, paradoxically, hostilities resumed almost immediately after the fragile agreement was signed digitally. Thus far, the skirmishes have not exacerbated into full-scale war. However, the tensions in the Strait of Hormuz are likely to disrupt the supply chain and lead to a rise in crude oil prices. The partial normalization that had been built into the shipping route has collapsed. Needless to say, it would reflect in the prices of oil and gas. According to the market information, though oil prices did rise only 2% in the meantime, it was the highest in four weeks.
This time, the bone of contention is the Strait of Hormuz, though it had figured as one among the thorny issues. Now the key dispute is not the nuclear arms or regime change in Iran. The US has opened a different corridor, which they say is the safe route, in the southern part of Hormuz for shipments bypassing the Iranian authorities. President Trump announced that the US will restart the naval blockade of Iran, will be the guardian of Hormuz and will levy a 20 percent toll to pass through the Strait. Iran, on its side, categorically declared that the US has no role in determining the future of Hormuz and that it would not allow the US to intervene. In the latest incident, Iran attacked two Emirati oil tankers on the southern side of the Hormuz.
Should the fighting intensify further, air traffic in the Middle East could be significantly affected, potentially derailing the lives of expatriates working in the Gulf, including the predominant Keralite segment as much as others in the region. In a way, we may be looking at a protracted low-intensity conflict between Iran and the US, reminiscent of the situation in Ukraine. If the conflict persists, the repercussions could definitely extend to the Gulf countries. Whenever the US targets Iranian sites, Iran has shown a propensity to retaliate against neighboring Gulf nations, where American assets are located. The defence capabilities of these Gulf states are markedly weaker compared to Iran, and any damage to their oil and gas infrastructure could have catastrophic effects on their economies. Unlike Israel, which benefits from substantial defence support, Gulf nations do not enjoy the same level of protection, although that was their hope when allowing US bases in their countries .
Central to the recent tensions is the control over the Strait of Hormuz. Iran holds significant influence over this strategic waterway, a situation that some Gulf countries—though not all—strive to counter. The US and Israel have a vested interest in preventing a powerful Iran, especially as control over Hormuz equates to considerable leverage, even impacting global economic dynamics. The world witnessed this during the intense 40-day conflict initiated by the US and Israel. Iran is unlikely to relinquish its long-held sovereignty over Hormuz anytime soon, and without an immediate resolution to this complex geopolitical landscape, hostilities between Iran and the US are expected to persist.
Iran enjoys tacit support from both Russia and China. While China may refrain from direct military intervention or arms sales to Iran, it is believed to provide intelligence support, which has enabled Iran to accurately target US bases in the Gulf region. This partnership is based on mutual need: China seeks inexpensive Iranian oil, while Iran looks to China for military assistance to bolster its defence capabilities, which continues despite ongoing US sanctions. The situation is also troubling for countless Keralites living and working in the Gulf, as economic instability is likely to arise from the ongoing conflict. The volatile political climate will undoubtedly impact Indian expatriates who have made their bets on living and working in the region for many years. Thus the broader implications of the current conflict could ripple back to India's economy, particularly in Kerala, which is home to a large immigrant community in the Gulf. The prospects of job insecurity amid such tensions give a dim picture, and as Auden eloquently put it, Something is going to fall like rain/And it won't be flowers.