Since last week, the Israel–Iran confrontation has escalated dramatically. Israel launched a wave of airstrikes against Iran’s nuclear and military facilities, targeting Natanz, Arak, and other sensitive sites. Iran responded with more than 400 ballistic missiles and drones, most of which struck urban centres in Israel. So far, more than 600 people have been killed in Iran, including civilians and military personnel. In Israel, over 24 people have lost their lives, and hundreds more have been injured in missile attacks that have damaged homes, hospitals, schools and apartment blocks.
The human toll is staggering, and daily life has been thrown into chaos. In Israel, air raid sirens have become a regular soundtrack. People have been rushing to bomb shelters and underground car parks, uncertain when the next siren will sound. Families in central cities like Tel Aviv and Beersheba are stockpiling food and water. In Iran, authorities have ordered evacuations around military installations, and large numbers of families have left Tehran altogether, fearing that Israeli strikes could reach even deeper into the capital.
The economic consequences have been just as alarming. Oil prices spiked more than ten per cent within hours of the first major exchange, driven by fears that Iran could disrupt shipping through the Strait of Hormuz. That narrow waterway carries around a quarter of the world’s oil supply. If it were closed, analysts warn the price of oil could soar above 120 US dollars per barrel. That affects the price of fuel, groceries, airfares, freight—and puts inflation pressure back on economies already struggling to recover from years of instability.
Stock markets responded immediately. Major indices in Sydney, London, New York and Tokyo all opened lower. Investors pulled their money out of shares and poured it into gold, government bonds, and the US dollar. The S&P 500 and the Dow Jones both dropped significantly, and bond yields fell as the appetite for risk disappeared. Economists now worry that a prolonged conflict could derail global growth, especially if it keeps inflation elevated and forces central banks to abandon planned rate cuts.
World leaders have issued a mix of warnings, justifications and calls for calm.
President Donald Trump, speaking in an interview with ABC News, said: “I think it’s been excellent. We gave them a chance and they didn’t take it. They got hit hard, very hard. And there’s more to come. A lot more.”
Trump followed that up with a statement to reporters: “I gave Iran chance after chance to make a deal. Today is day 61. They chose not to listen, and now they are paying the price.”
But even within Trump’s own camp, not everyone agrees. His former adviser Steve Bannon said: “We can’t do this again. We’ll tear this country apart. We can’t have another Iraq.”
In Europe, leaders have taken a more cautious tone. German Chancellor Friedrich Merz, speaking at the G7 summit in Canada, said: “This is the dirty work that Israel is doing for all of us. The aim must remain that Iran not develop any nuclear weapons. But we must avoid further escalation. We must stabilise the region.”
Germany’s Foreign Minister Johann Wadephul added: “Negotiations remain possible, but Iran must act urgently and sincerely. It must provide credible assurances that it is not pursuing nuclear weapons.”
The leaders of the UK, France and Germany released a joint statement saying: “All parties should exercise restraint and avoid escalation, which could compromise regional stability.” British Prime Minister Keir Starmer stressed the need to prevent a broader war and urged leaders to return to diplomacy, while French President Emmanuel Macron repeated calls for calm.
Russia has taken a sharply critical stance, with senior officials describing the situation as “millimetres away from nuclear catastrophe.” President Vladimir Putin has offered to mediate between the two countries, though many Western analysts see that as an attempt to expand Russia’s global influence during a time of crisis.
China also expressed concern. A spokesperson for its Foreign Ministry said: “China is deeply concerned about the current situation and calls on all parties to exercise maximum restraint. China is willing to provide a platform for dialogue and to contribute to peace.”
In the wider Middle East, the response has been angry and volatile. Protests have erupted in several countries, including Jordan, where police have arrested more than 1,500 demonstrators in recent days. In Lebanon, Hezbollah has threatened to intervene if Israeli attacks continue. In Yemen, the Houthi movement has redeployed missile systems closer to the Red Sea, posing a new threat to commercial shipping and global trade routes. Gulf states that had previously improved relations with Israel have now issued sharp warnings, expressing concern over regional instability and the threat to oil infrastructure.
Greece, which maintains deep diplomatic ties within the EU and across the Eastern Mediterranean, has echoed Europe’s broader position. Prime Minister Kyriakos Mitsotakis said from Athens that Greece is “gravely concerned by the scale of violence” and “fully supports all international efforts to de-escalate the conflict and ensure protection for civilians.” Greek officials have also confirmed that the Ministry of Shipping is monitoring potential threats to commercial vessels in the Red Sea and Persian Gulf. With one of the world’s largest merchant fleets, Greece has a strong economic interest in the uninterrupted flow of maritime trade through the region.
The reality is that this war is already reshaping the global economy, shaking alliances and inflaming divisions. It affects more than soldiers or cities under fire. It hits consumers, businesses and national budgets in countries far removed from the battlefield. Oil prices affect transport, food and power bills. Uncertainty affects investment and employment. Inflationary pressure could lead to more interest rate hikes, which hit homeowners and renters alike.
The world is watching—and feeling—the cost of every missile that falls.
The path forward is narrow but clear. Military action cannot deliver lasting peace or security. The only long-term solution is diplomacy. That will require courage and compromise from both Iran and Israel, but also real leadership from the United States, Europe, China and Russia. The international community must urgently pursue a ceasefire, open dialogue and re-establish mechanisms of verification and accountability.
If they fail, the consequences won’t stop in Tehran or Tel Aviv. They’ll ripple through every economy, test every alliance, and shape the lives of millions who have no say in the decisions that caused it. The time to stop the war is now. Before the damage spreads further. Before peace becomes harder to imagine than war itself.
