From Tehran to Tokyo: Israel–Iran War Redraws Asia-Middle East Ties

Future of connectivity and blocs

Jun 19, 2025

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The stakes are rapidly rising in the Israel-Iran conflict. As US President Donald Trump keeps the world guessing about whether America will enter the war, Iran is ratcheting up its warnings, like that it could close the Strait of Hormuz. Over 25% of the world’s oil flows pass through this narrow maritime lane, 70% of which goes to Asian markets like Japan, China, and India.

Fears are now rising that oil could reach $100 a barrel, or even $200 or $300 a barrel, causing inflation to skyrocket.

The future oil price depends on a variety of factors, many of which are not getting enough attention, including what Iranian-backed militias in Iraq do. Last year, when Israel and Iran collided in October, they warned that if the war worsened, they would not allow any energy to leave the Middle East.