Iran: A Nuclear Responsible State?

Abstract

A June 2025 Israel–Iran war, triggered by Israel’s Operation Rising Lion against Iranian nuclear and military sites, escalated into reciprocal Iranian strikes and brief U.S. involvement before a fragile ceasefire, while intermittent Israeli air operations continued and Iran exited the NPT and expelled IAEA monitors. The conflict’s core driver is Iran’s nuclear program, viewed by Israel and the U.S. as an existential threat and by Tehran as sovereignty and deterrence, with pre-war IAEA findings of enriched uranium heightening concern over weaponization risk. Energy security risks are acute: the Strait of Hormuz handles roughly 21 million barrels per day and over one-fifth of global LNG, so any disruption could propel oil above 100 dollars and transmit inflation across energy-dependent sectors and supply chains worldwide. Early 2025 outlooks signaled a potential 0.2% contraction in global merchandise trade amid compounding shocks, underscoring the conflict’s trade drag alongside tariff uncertainty, even as later updates improved full-year projections. India and other Asian importers face elevated exposure via energy costs and rerouting, while Israel’s domestic energy curtailments and regional trade corridors’ vulnerability amplify macro-financial risks, reinforcing calls for diplomacy and verifiable nuclear constraints over open-ended military coercion.