Iran strikes are a stress test for global order — and it’s failing

The US’ strike on Iran has shattered strategic norms, and dragged the global order into volatility, becoming the new normal

Joining Israel’s attack on Iran, the US strike on Iran’s nuclear infrastructure may have delivered a fleeting tactical advantage, but it has set off a cascade of strategic consequences the world is dangerously unprepared to contain.

It is a tragic farce of global politics that Pakistan, a State long synonymous with proxy extremism, should nominate Donald Trump for the Nobel Peace Prize — only for him, hours later, to authorise strikes that drag the world deeper into a regional war. There is a kind of poetic delusion at play, where the language of peace is used to crown the very architects of escalation.

This direct US intervention in a longstanding bilateral conflict of principles pokes a large hole in the already-fraying norms that have long governed global conflict management. Iran responded swiftly with missile attacks on Israeli territory. Tehran has declared its intent to shut down the Strait of Hormuz, the narrow maritime artery through which nearly a fifth of the world’s oil supply flows.

Iran has openly called for missile strikes against US naval vessels in the Gulf. It could be a direct challenge to the architecture of global maritime security and to the legitimacy of US’ forward military presence in the region. The language emerging from Tehran’s inner circle suggests a shift in posture — from strategic ambiguity to overt intent.

These escalations cannot be viewed in isolation. They reflect the collapse of what little remained of diplomatic restraint. The Joint Comprehensive Plan of Action (JCPOA), once held up as a viable model for non-proliferation diplomacy, had long been weakening. But until now, an unspoken mutual understanding had at least prevented open warfare. That buffer is gone. By choosing kinetic disruption over strategic patience, Washington has materially lowered the threshold for regional — and possibly global — escalation.

With domestic elections ahead, such assertive displays of force also carry domestic undertones. One must ask whether foreign policy resolve is being calibrated for deterrence abroad or demonstration at home — and what that dual purpose might cost the international order.

The immediate implications are becoming painfully clear. A closure — or even partial disruption — of the Strait of Hormuz would not only affect oil shipments to Asia, Europe, and beyond, but would also impose a structural risk premium on energy markets worldwide. Inflation expectations, currency stability, and global growth forecasts are already being recalibrated.

For India, the crisis presents not just a diplomatic dilemma but a strategic bind. Nearly eight million Indian citizens live and work across the Gulf, and over 60% of India’s oil imports pass through the Strait of Hormuz. The threat of maritime disruption touches both energy security and diaspora safety. At the same time, remittance flows, and regional diplomatic capital are at risk.

New Delhi will now find itself having to balance competing goals — protecting economic interests, preserving strategic autonomy, and preparing contingency responses — all while maintaining credibility in a highly polarised geopolitical environment.

Meanwhile, the United Nations is once again confined to issuing urgent calls for de-escalation, devoid of enforcement capability or political backing. The result is a widening power vacuum in the very institutions designed to uphold international order.

Washington appears to believe that overwhelming force can still restore deterrence. But history tells us that infrastructure can be rebuilt — what hardens, instead, is intent. Iran, now facing both reputational and strategic imperatives, may feel compelled to respond in ways that are not fully predictable — even to its own command structure.

Overlaying this is a more fundamental concern: the erosion of global norms. These strikes effectively legitimise the use of pre-emptive force against strategic infrastructure under the banner of threat containment. That precedent will not go unnoticed. In other parts of the world — from East Asia to Eastern Europe — where unresolved disputes fester, others may now believe they too can act with impunity. The international order, built on norms of non-proliferation, sovereignty, and proportionality, risks becoming increasingly discretionary. What is allowed once under duress becomes a precedent cloaked in ambiguity.

The longer-term diplomatic cost is mounting. Any prospect of reviving trust-based negotiations with Iran now faces a steeper uphill path. Inside Iran, political space for engagement will shrink further as hardliners consolidate control. In turn, Iran may lean more heavily on asymmetric capabilities, expanding its use of missile platforms, cyber tactics, and regional proxies to project force in ways that are harder to contain and easier to deny.

In trading floors from New York to Frankfurt to Singapore, focus will shift from geopolitical risk to economic contagion. Any protracted energy inflation could trigger a broader global slowdown. The concern is now about bond markets, capital flows, and the unsettling reality that geopolitical volatility is once again outpacing institutional credibility and economic resilience.

What the world needs is a co-ordinated, credible diplomatic initiative — one that moves beyond ceasefire rhetoric to construct a political roadmap with real security guarantees, economic stabilisers, and clearly defined regional de-escalation frameworks. The logic of restraint must outweigh the instinct to retaliate.

It is a stress test of whether the global order still has the capacity to manage strategic crises before they metastasise. If there is one lesson to draw from this unravelling moment, it is that the instruments of 20th-century deterrence are proving inadequate for the entanglements of 21st-century geopolitics.

The world, having inflicted a wound upon itself with full awareness, must now prevent that wound from becoming a permanent scar. As the world inches toward chaos, the military-industrial complex alone finds certainty — in conflict as continuity, and in escalation as enterprise. For those who profit from permanent crisis, every missile fired is not a cost, but a dividend, and possibly a vote.

Srinath Sridharan is a corporate adviser and independent director on corporate boards. X: @ssmumbai.

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.