Flames and Many Dead in the Gulf - When War Hits the Global Economy

The war between the United States, Israel and Iran reached a new dimension on Monday. It is no longer only about military bases or isolated targets. Tankers are being hit, refineries shut down, embassies shelled, fighter jets crashing. The shipping lane through the Strait of Hormuz, through which around one fifth of the world’s oil trade flows, is effectively blocked. In the Gulf of Oman, an explosives laden drone boat rammed the oil tanker “MKD VYOM,” sailing under the flag of the Marshall Islands. An Indian seaman was killed. Oman confirmed the attack off the coast of Muscat. Tehran had previously warned ships approaching the strait. According to the ship tracking platform MarineTraffic, traffic through the Strait of Hormuz has declined by about 70 percent since the start of the massive U.S.-Israeli strikes. Ships are turning back, stopping or abruptly changing course.

Saudi Arabia responded to a drone attack by temporarily closing the Ras Tanura refinery near Dammam. The facility processes more than half a million barrels of crude oil per day. Smoke was visible over the site. Riyadh described the move as a precautionary measure. The strike on Ras Tanura marks a direct blow to the economic heart of the kingdom. Greece also responded to Iranian drone attacks on a British base in Cyprus by dispatching two frigates and two fighter jets. Defense Minister Nikos Dendias emphasized that one of the warships is equipped with a modern anti drone system that was recently tested during an EU mission in the Red Sea to protect international shipping.

Kuwait also came under heavy fire. Rockets and drones struck the country, which hosts the U.S. Fifth Fleet command. Fire and smoke rose from the grounds of the U.S. Embassy in Kuwait City. The United States warned its citizens to seek shelter and not to approach the embassy. At the same time, U.S. Central Command stated that Kuwait had accidentally shot down three American F-15E Strike Eagles during the fighting. The jets were on combat missions when Iranian aircraft, ballistic missiles and drones attacked the country. All six crew members were able to eject and were rescued. Iranian state television later claimed that Tehran had deliberately shot down one of the aircraft.

Qatar reported two Iranian drone attacks on energy facilities, including a water tank at a power plant in Mesaieed and a Qatar Energy facility in Ras Laffan. There were no fatalities. In the United Arab Emirates, drones were intercepted over Abu Dhabi. Debris damaged a warehouse and a commercial building. The Emirates subsequently suspended trading on the stock exchanges in Abu Dhabi and Dubai for Monday and Tuesday. Air traffic across the region has come to a halt. Etihad Airways suspended all flights to and from Abu Dhabi until at least Tuesday at 2 p.m. local time. Qatar Airways also kept operations suspended. Jordan closed its airspace daily between 6 p.m. and 7 a.m. Tens of thousands of travelers are stranded.

Germany declared that it will not participate militarily in the war against Iran. Foreign Minister Johann Wadephul said on Deutschlandfunk that the federal government has neither the intention nor the military means to intervene actively. At the same time, he made clear that Bundeswehr soldiers in Jordan or Iraq would defend themselves if attacked. Attacks on multinational bases in Irbil in northern Iraq and Al Azraq in Jordan were reported, German soldiers remained unharmed. Around 30,000 German tourists are stranded in the Middle East according to Wadephul. A military evacuation is currently impossible because of closed airspace.

Hezbollah, the Iran backed terrorist organization in Lebanon, has fired rockets at northern Israel

In Lebanon, the situation escalated further. After Hezbollah fired rockets at Israel, the Israeli air force again struck targets in Beirut and in the south of the country. At least 31 people were killed according to the Lebanese health ministry, 149 injured. Chief of Staff Eyal Zamir spoke of potentially many days of combat. Military spokesman Effie Defrin stated that a ground offensive in Lebanon is also possible. Prime Minister Nawaf Salam called on Hezbollah to hand over its weapons to the state. Only the state decides on war and peace.

In Iran itself, the Iranian Red Crescent reported at least 555 dead in 131 affected cities. In Sanandaj, three people were killed in attacks on residential areas. In Yazd, six sites were struck according to state media. The Gandhi Hospital in Tehran was damaged after a strike hit a nearby state television transmission tower. Eyewitnesses reported an impact in northern Tehran that interrupted the state broadcast.

Iran’s ambassador to the International Atomic Energy Agency, Reza Najafi, stated that the uranium enrichment facility in Natanz had been targeted by airstrikes. The United States and Israel did not confirm this. IAEA chief Rafael Mariano Grossi said in Vienna that there are so far no indications of damage to nuclear facilities such as Bushehr or the research reactor in Tehran and no elevated radiation levels in neighboring states.

After the death of Supreme Leader Ali Khamenei in U.S.-Israeli strikes, a provisional council is conducting state affairs. It includes cleric Alireza Arafi, President Masoud Pezeshkian and Judiciary Chief Gholamhossein Mohseni Ejei. Arafi said on state television that they hope for a swift appointment of a new Supreme Leader by the 88 member Assembly of Experts. Influential politician Ali Larijani publicly declared that Iran will not negotiate with the United States.

In Bahrain, sirens wailed after the country came under fire. Explosions were heard in Irbil in northern Iraq. In Cyprus, a drone struck the grounds of the British air base RAF Akrotiri. In Turkey, border crossings for short term travel by Iranian citizens were temporarily suspended.

Donald Trump: “Three members of the U.S. armed forces have fallen in action … Unfortunately there will probably be more before it is over. That is the way it is. There will probably be more.” This statement requires no further comment - editorial note.

A full briefing of Congress is scheduled for Tuesday, with Hegseth and Caine set to appear alongside Secretary of State Marco Rubio and CIA Director John Ratcliffe. In a video message, President Donald Trump said there would “likely be more” fallen U.S. service members before the conflict ends and vowed that the dead would be avenged. At the Pentagon, Defense Secretary Pete Hegseth defended the joint military strike on Iran as a necessary response to years of escalation. He argued that Tehran had deliberately stalled negotiations while simultaneously expanding its missile and drone capabilities to shield what he described as its nuclear ambitions. The operation, Hegseth said, was “the most precise aerial campaign in history,” framing it as retribution for what he called Iran’s decades-long anti-American strategy across the region. Meanwhile, European natural gas futures surged by more than 42 percent — a stark indication of how directly the war is reverberating through global energy markets.

Pressure is also mounting in Cyprus. The government in Nicosia announced it will formally protest the use of British military bases on the island for strikes against Iran. Government spokesman Constantinos Letymbiotis pointed to prior assurances from London that the bases would be used strictly for humanitarian purposes. After Prime Minister Keir Starmer agreed to allow the United States to use the facilities for operations targeting Iran, President Nikos Christodoulides now finds himself navigating a delicate position — caught between alliance commitments and the realities of a rapidly widening regional conflict.

The markets reacted immediately. The price of oil rose by around nine percent. Futures on the Dow Jones and S&P 500 fell sharply. The dollar gained against the yen and the euro. In Europe, stock exchanges opened lower while energy stocks in China rose. This war reaches for everything that keeps states stable: energy, trade, transport, diplomacy. Tankers burn, refineries stand still, fighter jets crash, embassies are hit, airspace closes. The Strait of Hormuz has become a bottleneck through which the global economy can barely pass. Each additional day increases the pressure - militarily, economically, politically.

War, and the world seemingly cannot get enough of it. While in Kharkiv once again residential buildings, a children’s hospital, parks and a gas production facility are hit, while at least nine settlements are under fire and people emerge injured from the rubble, elsewhere crashing U.S. fighter jets draw more attention.

Ukraine is holding the line. What other choice do they have. Ukrainian forces have struck several strategic targets, including Russian warships and the 30N6E2 radar guidance system of the S-300 PMU-2 “Favorit” air defense system. In addition, the Pantsir-S2 air defense system and six of seven oil transfer points at the Sheskharis terminal were destroyed - a significant counterstrike against military and logistical infrastructure.

The spectacle displaces the horrific. Yet the sum of these reports tells something else: The world is not only in transition, it is on alert. Authoritarian national leaders are gaining ground, right wing populism is poisoning democratic republics, and the state of emergency is embedding itself into daily life.

And in the midst of these headlines we think of our two Kaizen guys who are stranded in India, blocked by closed airspace and a situation that escalates anew each day. War is not only front lines and fire. It is also standstill, holding patterns, waiting for a return flight. From here, we are trying to ensure that they come back as quickly as possible.