The U.S. State Department approved the “emergency” sale of 12,000 bomb casings to Israel as the countries engage Iran in an escalating West Asia war. Image used for representation purpose only.
| Photo Credit: Getty Images/iStockphoto

The Iran war has effectively halted oil tanker movement in the key Strait of Hormuz. But it’s also disrupting the wider global supply chain beyond oil, affecting everything from pharmaceuticals from India, semiconductors from Asia and oil-derived products like fertilisers that come from the West Asia.

Cargo ships are stuck in the Gulf or making a much longer detour around the southern tip of Africa. Planes carrying air cargo out of the West Asia are grounded. And the longer the war drags on, the more likely it is that there will be shortages and price increases on a wide range of goods.

“This is really causing some major impacts within the global supply chain,” said Patrick Penfield, professor of supply chain practice at Syracuse University. “As this conflict keeps progressing, you’ll start to see some shortages, you’ll see some major price increases.”

Stalled at sea

Clarksons Research, which tracks shipping data, estimates that about 3,200 ships, or about 4% of global ship tonnage, are idle inside the Persian Gulf, but that includes about 1,231 that likely only operate within the Gulf. About 500 ships, or 1% of global tonnage, are currently “waiting” outside the Gulf in ports off the coast of the United Arab Emirates and Oman, according to the firm.

“The supply chain is kind of like a long train with many cars, and each car represents, let’s say, a port in the world. Well, if one car gets derailed, it can very often have a domino effect on many other cars behind it or in front of it,” he said. “So, although we only have a small number of ports affected by this military action, it can really have a big effect on the total supply chain.” On Tuesday (March 3, 2026), President Donald Trump pitched a plan aimed at getting oil and trade moving again through the Strait.

Mr. Trump said on social media he ordered the U.S. International Development Finance Corp. to provide political risk insurance for tankers carrying oil and other goods through the Persian Gulf “at a very reasonable price.” Political risk insurance is a type of coverage intended to protect firms against financial losses caused by unstable political conditions, government actions, or violence. Marine insurers had been cancelling or raising rates for insurance in the region.

He said that, if necessary, the U.S. Navy would escort oil tankers through the Strait of Hormuz.

Computer chips, pharmaceuticals and other goods face delays

A wide range of products is shipped through the West Asian region. Along with about 20% of the world’s oil that comes from the region, products made with natural gas, such as petrochemical feedstock — used to make plastic and rubber — and nitrogen fertiliser come from the West Asia. Pharmaceuticals exported from India and semiconductors and batteries exported from Asia to the rest of the world are all shipped through the region and could face delays.

Limited routes, higher costs

In addition to constraints on the Strait of Hormuz, the instability has put a damper on transit in the Red Sea and the Suez Canal, which had just begun to see more transit after years of instability due to Houthi attacks on ships in the region.

Air cargo under pressure

Air cargo has also been constrained. Closed airspace and airports in countries including the UAE, Qatar, Bahrain, Kuwait, Iraq, and Iran have stranded tens of thousands of people and cargo.

Each of the three major West Asian airlines — Emirates, Qatar Airways and Etihad Airways — operates fleets of cargo aircraft, and the airlines also transport goods in the belly of their passenger planes.

The amount of goods that travel through the air typically accounts for less than 1% of all freight moving globally, but the products that do travel by air tend to be perishable or high-value goods like pharmaceuticals, electronics and produce that together account for about 35% of the world trade value, Boeing estimated in its World Air Cargo Forecast.

The longer these airports in the West Asia remain closed, the greater the potential disruption to the economy if these sensitive shipments don’t arrive or have to be rerouted around the conflict.

Flights through these West Asian airport hubs are a key route for passengers and cargo from India. Henry Harteveldt, an airline industry analyst with Atmosphere Research Group, said it’s going to be hard to get to India now.

Air cargo costs are expected to rise due to reduced capacity, increased demand, and surcharges.

Maersk said in an operational update on Tuesday (March 3, 2026) that it expects air freight rates to rise due to capacity constraints.

An industry that runs on disruption’

Despite the supply chain upheaval, however, Michael Goldman, general manager of North America of CARU Containers, said the industry will adjust. Over the past few years, it has faced other major disruptions like COVID supply shortages and other recent West Asian conflicts and has become more nimble.

“The specific situation that’s happening is pretty unprecedented, so it’s very unique from that perspective,” he said. “(But) for the last few years the industry just kind of runs on disruption. So in terms of our industry having disruption, that is nothing new. That’s more of the same.”

Published – March 04, 2026 12:42 pm IST

, March 4, 2026 (AFP)

Israel early Wednesday (March 4, 2026) launched new attacks on Iran as the U.S. military said it has hit nearly 2,000 targets inside the Islamic republic, which tried to impose a cost by expanding a missile and drone barrage across the region.

Iran-Israel war LIVE

With global energy prices on the rise, U.S. President Donald Trump said the U.S. Navy was ready to escort oil tankers through the Strait of Hormuz, the vital chokepoint into the Gulf that Iran has threatened to seal off.

Israel’s military said it launched a “broad wave of strikes” after midnight across Iran, which in the hours before had launched three separate missile barrages at Israel, causing mild injuries to a woman in Tel Aviv.

The U.S. military has hit nearly 2,000 targets since attacking Iran alongside Israel on Saturday (February 28, 2026), targeting ballistic missiles and “all the things that can shoot at us”, said Admiral Brad Cooper, commander of U.S. Central Command.

“These forces bring a massive amount of firepower, representing the largest buildup by the U.S. in the Middle East in a generation,” he said in a video message, describing the first day’s barrage as bigger than the so-called “shock and awe” against Saddam Hussein’s Iraq in 2003.

The U.S. and Israeli attacks have killed 787 people in Iran, according to the Iranian Red Crescent, a toll that could not be independently confirmed by AFP.

Iran vowed to inflict a heavy price in retaliation. Drones struck adjacent the U.S. consulate in Dubai, starting a fire but inflicting no casualties, and against the U.S. military base at Al-Udeid in Qatar.

The attacks came a day after strikes on the U.S. embassies in Riyadh and Kuwait City and on a U.S. air base in Bahrain.

“We are saying to the enemy that if it decides to hit our main centres, we will hit all economic centres in the region,” Islamic Revolutionary Guard General Ebrahim Jabbari said.

Trump says no more talks

The United States and Israel launched the attack on Saturday (February 28, 2026) and quickly killed Iran’s supreme leader, Ayatollah Ali Khamenei, two days after U.S. envoys had been speaking to Iran in Geneva on a nuclear accord.

Mr. Trump insisted that Iran wanted to resume talks but it was “too late”.

He also walked back a statement the day before from Secretary of State Marco Rubio, who said the U.S. attack’s timing was precipitated by Israel’s plans.

“If anything, I might have forced Israel’s hand,” Mr. Trump said as he met German Chancellor Friedrich Merz at the White House.

Mr. Trump boasted that “just about everything’s been knocked out” in Iran, including its navy, air force and air detection, and said the attacks had killed even leaders who could have taken over.

“Most of the people we had in mind are dead,” Mr. Trump said. “Now we have another group. They may be dead also, based on reports.”

According to Iranian media, U.S. and Israeli strikes targeted a building on Tuesday (March 3, 2026) in the holy city of Qom belonging to the committee that is to elect a new supreme leader. The Tasnim news agency reported that strikes had already targeted the body’s main headquarters in Tehran the day before.

Mr. Trump and Israeli Prime Minister Benjamin Netanyahu have urged Iranians to rise up but Mr. Trump said regime change was not the goal.

The assault came weeks after Iranian authorities clamped down on mass protests, killing thousands.

Lebanon violence expands

The regional war also took a growing toll on Lebanon, where Hezbollah, the armed Shiite Muslim movement that long had Tehran as a benefactor, launched drones and rockets at Israel in retaliation for Khamenei’s slaying.

Hezbollah said it targeted the Israeli naval base in the northern city of Haifa and Israel said it struck Beirut’s heavily Shiite southern suburbs. Loud explosions were heard early Wednesday (March 4, 2026).

Israeli strikes have killed at least 52 people in Lebanon, according to the government, while the United Nations said that more than 30,000 people were displaced.

In a throwback to earlier wars, Israel said it was moving troops across the border to create a buffer zone inside Lebanon.

In Tehran, photos showed damage to Mehrabad airport, which handles mainly domestic flights.

The Israeli military also announced a strike on an underground facility on the eastern outskirts of Tehran where it alleged scientists were covertly working on a nuclear programme.

The United States ordered non-emergency personnel to leave embassies in much of the region. The Washington Post reported that the Iranian drone in Riyadh hit the station of the CIA.

The United States encouraged all Americans to leave the region if they can find commercial flights, even though air travel has been severely disrupted.

The State Department said that some 9,000 Americans have found a way home.

Qatar said it had downed missiles targeting Hamad International Airport in Doha. Oman reported several drones attacking the port of Duqm, and in the UAE falling debris from an intercepted drone caused a fire at an oil storage and trading zone, authorities said.

Ghost town

In Tehran, residents who have not fled remained shut away in their homes for fear of the U.S.-Israeli bombardment.

The Iranian capital is normally home to around 10 million people, but in recent days “there are so few people that you’d think no one ever lived here”, said Samireh, a 33-year-old nurse.

Authorities had previously urged people to leave the city, and police officers, armed security forces and armoured vehicles have been stationed at main junctions, carrying out random checks on vehicles.

In the more upmarket north of Tehran, the meowing of cats and chirping of birds replaced the usual din of traffic jams.

Iranian authorities said a strike on a school in the city of Minab on the first day of the war killed more than 150 people. AFP has been unable to access the location independently to verify the toll or circumstances.

The U.S. military began naming the first of six troops who have been killed. In Israel, nine people died Sunday (March 1, 2026) when a missile hit the town of Beit Shemesh.

At least eight people have died across the Gulf.

The United States and Israel have received lukewarm support, with Western nations limiting involvement to helping Gulf states and repatriating citizens.

Canadian Prime Minister Mark Carney, who had backed the strikes, said Wednesday (March 4, 2026) in Sydney that it was time for “rapid de-escalation”.

Travellers stranded by a widening war began departing the United Arab Emirates aboard a small number of evacuation flights on Monday, even as most commercial air traffic across the Middle East remained suspended.

The limited flights out of Dubai and Abu Dhabi took place as the U.S. State Department urged its citizens in 13 countries, including the UAE, Jordan, Saudi Arabia, Egypt, Lebanon and Oman, to “depart now via commercial means due to serious safety risks.” Sweeping airspace closures and flight cancellations across the region left many fewer options for heeding the advice.

Since US and Israeli strikes on Iran and retaliatory attacks on Israel and Gulf states started Saturday, commercial flights have been halted or heavily restricted, leaving tourists, business travellers, migrant workers and religious pilgrims stuck in hotels, airports and aboard cruise ships.

Airspace remained closed Monday over Iran, Iraq and Israel. Jordan instituted a temporary closure beginning Monday afternoon. Other countries in the Gulf — including Qatar, Bahrain, Kuwait and Saudi Arabia — had partial or temporary closures that could be extended, according to flight-tracking service Flightradar24.

About 13,000 of the roughly 32,000 flights scheduled into and out of the Middle East since Saturday have been cancelled, aviation analytics firm Cirium said.

-AP

A man displays a portrait of Iran’s Supreme Leader Ayatollah Ali Khamenei as supporters of Iraqi Shi’ite armed groups gather to show support for Iran on the day the United States and Israel launched strikes on Iran, in Basra, Iraq, on February 28, 2026.
| Photo Credit: Reuters

In July 1977, Mohammad Reza Pahlavi, the Shah of Iran, sent Lt. Gen. Hassan Toufanian, his Deputy Minister of War and Armaments, to Israel to hold secret talks with the newly formed Likud government of Menachem Begin. Three months earlier, the Shah had signed six ‘oil for arms’ contracts with Shimon Peres, the acting Prime Minister in the previous interim government. One of the contracts, code-named ‘Flower’, sought Israel to modify its advanced surface-to-surface missiles and sell them to Iran. Gen. Toufanian’s mission was to ensure that the change of government in Israel would not affect the deal. He met Maj. Gen. Ezer Weizman, Defence Minister in the Begin government, and both of them agreed to build a military co-production line — Israel was to provide the technical know-how and Iran the finances and test sites. As part of it, Israel promised to supply Iran with ballistic surface-to-surface missiles with a range of 700 km that could carry nuclear warheads, writes journalist Ronen Bergman in his book, The Secret War with Iran.

Iran-Israel conflict LIVE

But within two years, the relationship had turned upside down. The Shah was toppled by nationwide protests. Ayatollah Ruhollah Khomeini, a leading Shia cleric, arrived in Tehran in February 1979 from exile in Paris. Shia Islamists, under Khomeini’s leadership, took over the reins of the country and turned it into an Islamic Republic — a semidemocratic, theocratic state. The new Iran declared “liberation” of Jerusalem one of its key objectives. At the U.S. Embassy in Tehran, 66 Americans, including diplomats and civilian personnel, were taken hostage by revolutionaries. For revolutionary Iran, America, which had orchestrated the 1953 coup against nationalist Prime Minister Mohammed Mossaddegh and had been the principal backer of the Shah, was the “great Satan”, while Israel, the occupier of Palestine, was the “little Satan”.

The revolution did not just transform Iran; it was also a geopolitical earthquake. If the Shah’s Iran had been one of the pillars of the U.S.-Israel alliance, Khomeini’s Iran emerged as this alliance’s top nemesis. Forty-seven years later, that enmity has escalated into a full-blown war, with Israel and the U.S. launching air strikes in Iran and Tehran retaliating against Israel and American bases in the region.

A new rival

The Islamic Republic was born in a region that was already witnessing new currents in Arab-Israeli relations. In 1978, Egypt became the first Arab country to recognise Israel, in return for the Sinai Peninsula which Israel had seized in the 1967 War. Arab countries, though still supportive of the Palestinian cause, were moving away from the phase of confrontation with Israel. For Shia revolutionary Iran, its support for Palestine was not only a religious duty but also a practical foreign policy move aimed at winning over the Muslim world, bridging the Shia-Sunni divide. Israel, which established conventional deterrence against Arab countries in the region, saw a new enemy emerging. The rivalry between Israel and Iran has shaped West Asia’s geopolitics ever since.

With support from the U.S. and other Western partners, Israel, a nuclear-armed country, has emerged as the most powerful military in the region. On the other side, Iran, which faced American sanctions immediately after the revolution, turned to building and supporting a network of militias. In the early 1980s, Iran helped create Hezbollah, a Lebanese Shia movement. And in the 1990s, it doubled down on its support for Hamas and the Islamic Jihad. When the Oslo process, which promised a two-state solution to the Palestine question, collapsed in the latter half of the 1990s, Hamas emerged as a major pillar of the Palestinian resistance. This, in turn, turned Iran into a key player in the Israel-Palestine crisis.

In southern Lebanon, Israel found it increasingly difficult to continue its occupation amid Hezbollah’s resistance. Iran provided money, training and weapons to Hezbollah through Syria, which was ruled by the Assad family. In 2000, after 18 years of occupation, Israel was forced to withdraw from southern Lebanon, and Hezbollah claimed that it was the first Arab force to defeat the Israeli army. In 2006, Israel attacked Lebanon again, but Hezbollah survived the month-long campaign.

Regional influence

This strategy of forward defence appeared to be working in Iran’s favour in the early 2000s. Look, for example, at the 2003 U.S. invasion of Iraq. Before the invasion, U.S. President George W. Bush had grouped Iran with Iraq and North Korea as part of an ‘Axis of Evil’. There was much speculation that the Bush administration would turn to Iran once the Iraq war was over. But the fall of Saddam Hussein, the Iraqi leader who attacked Iran in 1980, removed a critical buffer between the Persian Gulf kingdoms and Iran.

When Iraq, a Shia-majority country, held elections after the fall of Saddam’s regime, Shia parties with historical ties to Tehran emerged as the new ruling elite. When Iraq descended into a sectarian civil war between Sunni jihadists and Shia militias, the U.S. became deeply entangled in the conflict. Iran’s influence stretched along the so-called Shia crescent, from Tehran, through Baghdad and Damascus all the way to southern Lebanon, on Israel’s northern border. At home, Iran also advanced its nuclear programme. But this ascent was short-lived. Arab Spring protests, which broke out in late 2010 and shook several regimes in the region, marked the beginning of the decline of Iran’s influence.

News Analysis | What does Trump want from Iran?

The protests saw the deeply entrenched regimes of Tunisia and Egypt collapse. In Libya, NATO made a military intervention against the regime of Moammer Gaddafi. In Yemen, President Ali Abdullah Saleh had to resign amid sustained protests and a new Saudi-nominated government took charge. The crisis in Yemen also saw the rise of Ansar Allah (Houthis), who captured Sanaa in 2014, giving Iran direct influence in Saudi Arabia’s backyard. But in Syria, protests against the regime of President Bashar al-Assad threatened to cut short Iran’s regional influence. Mr. Assad’s Syria was Iran’s only regional state ally. It was also a vital link between Hezbollah and Tehran. If the regime fell, it would cut off the link, weakening both Iran and Hezbollah.

Iran knew what was at stake, and it did not hesitate for a moment in helping the Syrian government. Thousands of Hezbollah fighters crossed the border into Syria to fight alongside the regime forces. Iran mobilised Shia fighters from across the region and sent them to Syria. In September 2015, Russian President Vladimir Putin decided to send Russian special forces and fighter jets to Syria in defence of the government. With help from Russia, Iran and Hezbollah, the Assad regime turned the tide of the civil war and recaptured most of the lost territory.

Sunni countries in West Asia as well as their Western partners who initially called for Mr. Assad’s departure saw their policy backfiring after the rise of the Islamic State. The Islamic State practically erased the border between Iraq and Syria and created a proto-state, stretching from Raqqa in Syria to Mosul in Iraq. For Iran, the Islamic State represented a two-way threat. Its rise threatened to unravel two of Iran’s friendly states in West Asia — Iraq and Syria. Two, the extremist, sectarian Salafi-Jihadist ideology, which calls Shias “rejectionists” of faith, was an existential threat. At this point, Iran and the U.S. found common ground in defeating the Islamic State.

The View from India | What is Israel’s endgame in Iran?

Nuclear deal

The most contentious issue between Iran and the U.S. was the former’s nuclear programme. Iran had built a sprawling nuclear infrastructure, but maintained that its programme was peaceful. Successive U.S. governments had imposed biting sanctions on Tehran over the nuclear programme. In 2013, the U.S., under the Obama administration, started direct talks with Iran, after Hassan Rouhani, a moderate cleric, was elected President. In 2015, both sides, along with other world powers, agreed to the Joint Comprehensive Plan of Action (JCPOA), which sought to limit Iran’s nuclear programme, denying it a path towards the bomb, in return for lifting international sanctions. Almost all powers in the world welcomed the agreement, which was seen as a new chapter in the hostile post-1979 relations between the U.S. and Iran. Except one — Israel.

Mr. Obama went ahead with the deal and lifted sanctions on Iran despite Israel’s opposition. The reset seemed to be working, especially when the U.S. and Iranian sides started coordinating with each other in the battle against the Islamic State in Iraq. But it did not last long. The man who succeeded Mr. Obama was Donald Trump, whom Mr. Netanyahu described as the “greatest friend of Israel”. The writing on the wall was clear.

Mr. Trump termed the JCPOA the “worst deal” in U.S. history. In May 2018, despite UN confirmation that Iran was fully compliant with the terms of the agreement, Mr. Trump withdrew the U.S. from the agreement and reimposed sanctions on Iran, taking Iran-U.S. ties back to the pre-Obama era of hostility. After the U.S. imposed sanctions, Iran started enriching uranium to higher than the permissible limits. Israel, on its part, carried out a host of covert operations inside Iran, including the killings of the country’s top nuclear scientists.

June war

Mr. Trump wanted concessions from Iran on its weapons programmes and regional activism (support for non-state actors). But Iran took a ‘maximum resistance’ policy to Mr. Trump’s maximum pressure — it carried out attacks in Saudi Arabia and in the Gulf waters, stepped up support for its proxies, especially the Houthis in Yemen. In January 2020, the U.S. assassinated Qassem Soleimani, a charismatic Iranian General who oversaw the IRGC’s external operations. It was a massive blow to Iran. Tehran responded by attacking an American base in Iraq, but the crisis blew over as both sides did not want an all-out war. What would change that dynamic was the October 7, 2023 Hamas attack on Israel and the subsequent developments in the region.

Israel declared two primary objectives — the destruction of Hamas and the release of the 251 hostages taken on October 7. But the way it fought the war suggests that it has deeper ambitions. For Israel, Hamas was only the tip of the iceberg. Its real enemy was Iran. After October 7, Israel saw an opening to wage a two-front war — the first was to crush Palestinian resistance once and for all, and the second was to dismantle Iran’s axis and weaken its regional influence. Prime Minister Netanyahu wanted to build a unipolar West Asia, with Israel, backed by the U.S., being the central security player; roll back Iran; keep Arab countries under check; and push the Palestinian question back to the margins of the region.

In Syria, the collapse of the Bashar al-Assad regime in December 2024, and the rise of Abu Mohammed al-Golani (Ahmed al-Sharaa), a former al-Qaeda jihadist, marked a tactical victory for Israel. A weakened Hezbollah was further isolated, and Iran’s forward defence suddenly looked porous. Iran lay vulnerable to external threats. Then it was only a matter of time before a direct attack against Iran. Sensing danger, Iran started indirect talks with the Trump administration. Iran’s message was that it was ready to cut a deal over its nuclear programme. Its political and security leaders repeatedly said it was not seeking to build a nuclear bomb. But on June 13, two days ahead of the planned sixth round of talks between Washington and Tehran, Israel started bombing Iran. A few days later, the U.S. joined the war, attacking Iran’s key nuclear facilities. After 12 days of fighting, both sides agreed to a ceasefire. Mr. Trump claimed that he had “obliterated” Iran’s nuclear programme and Mr. Netanyahu declared a “historic victory”. But the crisis was far from over.

Israel wants Iran to give up its nuclear programme, end its missile production and stop supporting non-state militias in the region. In other words, Israel wants Iran’s total disarmament. Iran was open to a deal on its nuclear programme but would not discuss other issues. The Trump administration’s officials, including Marco Rubio, the Secretary of State, also backed the Israeli demands, saying Iran should talk about issues beyond its nuclear programme. This led to fundamental disagreements in diplomacy. The only way Israel could meet these objectives is by bringing about regime change in Tehran and installing a new puppet regime.

Road to chaos

In January 2026, when protests broke out in Iran over a falling currency, Mr. Trump quickly offered his support for the protesters. He said the U.S. was “locked and loaded”. Protests and riots spread across Iranian provinces in the first half of January. Iranian authorities blamed foreign agents for triggering “riots and terrorism”. Mossad, Israel’s intelligence unit, also claimed that its agents were “on the field” in Iran. On January 8-9, Iranian authorities crushed the rebellion. At least 3,000 people were killed. A tense calm prevailed in Iran after the crackdown, but external threats mounted.

Mr. Trump started building America’s largest military presence in the region since the 2003 Iraq war, while diplomats from both sides met at least three times. Iran claimed progress after each time, but the U.S. said gaps remained. On February 28, Oman’s Foreign Minister Hamad Al Busaidi told CBC that a deal was within reach. He said Iran agreed not to make a nuclear weapon and not to stockpile nuclear material. “If the ultimate objective is to ensure forever that Iran cannot have a nuclear bomb, I think we have cracked that problem through these negotiations by agreeing [on] a very important breakthrough that has never been achieved anytime before,” Al Busaidi said.

A few hours later, Israel and the U.S. started bombing Iran, targeting the country’s top leadership as well as government and military installations. Israel called it a “pre-emptive strike” and said it “would continue as long as necessary”. Mr. Trump, indicating that regime change was his goal, told Iranians: “The hour of your freedom is at hand”. Iran, which rapidly retaliated by firing ballistic missiles at Israel and at least five American bases in the region, said, “This is a national struggle imposed on us”. This attack, Iran’s Foreign Ministry said, “could mark the beginning of the end for international institutions and norms.” America and Israel seek regime change and a permanent shift in the balance of power in West Asia. For the Islamic Republic, this is a war of survival.