<p>On Saturday morning, your columnist welcomed participants to an unusual weekend session with the explanation that the subject could not wait. The conflict in the Middle East had already moved beyond the realm of distant geopolitics and into the calculus of business. Oil, gas, shipping lanes, insurance costs,inflation, fertiliser supplies and market sentiment were all in play. That, in essence, was why IMA convened the discussion at short notice and why Pramit Pal Chaudhuri, India head of Eurasia Group, was invited to lead it. Few observers combine geopolitical insight with such an understanding of how statecraft, energy flows and commercial risk play out. Mr Chaudhuri’s main argument was that the conflict cannot be understood as an isolated exchange between Israel and Iran. It is the product of a larger rearrangement in West Asia starting with America’s gradual withdrawal from the region, the weakening of the old security order and the emergence of competing regional coalitions. For years, the basic fault line was straightforward– Iran versus the rest. Tehran built influence across Iraq, Syria and Lebanon and used this combination to threaten its rivals. The response, led in large part by the UAE, was to construct a new regional architecture that did not depend entirely on America. The Abraham Accords, the attempt to bring Israel into a wider Arab security framework and the inclusion of India in newer groupings all formed part of that project.</p><p>For a while, that architecture seemed to be taking shape. But the October 7 attacks and Israel’s subsequent military campaign blew apart any illusion of stability. Mr Chaudhuri argued that Israeli Prime Minister Benjamin Netanyahu saw in this turmoil both danger and opportunity. Danger because October 7 exposed a grave failure of Israeli security and opportunity because Iran and its proxies appeared weaker than before. Hezbollah was badly degraded. Syria’s old order collapsed. The broader Iranian axis of influence was fraying. In that setting, Israel concluded that this was the moment to push harder against what it regards as its only true existential threat – the Iranian regime and, even more importantly, its nuclear and missile capabilities. The war, then, is not merely retaliatory. It is strategic. Israel believes time has opened a narrow window in which Iranian power can be set back by years. Iran, for its part, sees the fight in equally existential terms.That is what makes the conflict so dangerous. Both sides believe they can absorb pain. The true uncertainty lies not in Tehran or Tel Aviv, but in Washington. Israel cannot sustain such a campaign without American support. Iran knows this too. Hence its strategy has shifted towards imposing economic costs on the United States and its allies rather than pursuing only direct military escalation.</p><p>That has profound implications for the Gulf. One of Mr Chaudhuri’s sharper insights was that the most immediate vulnerability may not be oil production itself, but the economics of movement. Iran does not need physically to shut the Strait of Hormuz in order to damage trade. It need only raise the threat level enough for insurers and shipping companies to balk. That, by itself, can disrupt flows, drive up prices and create uncertainty across energy and commodity markets. In this conflict, perception can be as powerful as blockade. For India, the picture is sobering but not alarming. Mr Chaudhuri’s assessment was that there is no direct security threat to India. The concern is economic. Oil, in his telling, is manageable. India has some buffer stocks, global supply remains available and alternative arrangements can be made. The more sensitive areas are LNG, fertiliser inputs such as urea and LPG for households. Here the risks are more immediate, because gas markets are tighter and cooking fuel carries obvious political sensitivity. Beyond energy, other industrial inputs, including sulphur and aluminium, could also come under pressure if the war drags on.</p><p>India’s diplomatic position, meanwhile, has become clearer. New Delhi remains formally neutral, but itsstrategic anchor in the Gulf is now the UAE. That matters. India has conveyed, both publicly and privately, that attacks spilling into the southern Gulf are not acceptable. The war between Israel and Iran may be one thing, but threats to the UAE, with which India has deep economic and strategic ties, are quite another. Perhaps the most consequential part of Mr Chaudhuri’s remarks concerned the larger geopolitical order. America, he argued, is not disappearing overnight, but it is retreating in stages. Each intervention is more reluctant than the last and each commitment more conditional. That leaves middle powers to work more closely with one another. India has already begun to move in that direction, deepening ties with countries such as Japan, France, parts of Europe, Canada and the UAE. In a more fragmented world, such partnerships will matter more. </p><p>His broad expectation was that the war may not endure for very long, perhaps only a few weeks, largely because economic strain and domestic politics in America will begin to bite. Yet even if the fighting subsides soon, the lesson will remain. The old order in West Asia is gone. A looser, harsher and more transactional one is taking its place. For business leaders, that means geopolitical risk is no longer a background concern. It is becoming a permanent line item in strategy.</p>
<p>On Saturday morning, your columnist welcomed participants to an unusual weekend session with the explanation that the subject could not wait. The conflict in the Middle East had already moved beyond the realm of distant geopolitics and into the calculus of business. Oil, gas, shipping lanes, insurance costs,inflation, fertiliser supplies and market sentiment were all in play. That, in essence, was why IMA convened the discussion at short notice and why Pramit Pal Chaudhuri, India head of Eurasia Group, was invited to lead it. Few observers combine geopolitical insight with such an understanding of how statecraft, energy flows and commercial risk play out. Mr Chaudhuri’s main argument was that the conflict cannot be understood as an isolated exchange between Israel and Iran. It is the product of a larger rearrangement in West Asia starting with America’s gradual withdrawal from the region, the weakening of the old security order and the emergence of competing regional coalitions. For years, the basic fault line was straightforward– Iran versus the rest. Tehran built influence across Iraq, Syria and Lebanon and used this combination to threaten its rivals. The response, led in large part by the UAE, was to construct a new regional architecture that did not depend entirely on America. The Abraham Accords, the attempt to bring Israel into a wider Arab security framework and the inclusion of India in newer groupings all formed part of that project.</p><p>For a while, that architecture seemed to be taking shape. But the October 7 attacks and Israel’s subsequent military campaign blew apart any illusion of stability. Mr Chaudhuri argued that Israeli Prime Minister Benjamin Netanyahu saw in this turmoil both danger and opportunity. Danger because October 7 exposed a grave failure of Israeli security and opportunity because Iran and its proxies appeared weaker than before. Hezbollah was badly degraded. Syria’s old order collapsed. The broader Iranian axis of influence was fraying. In that setting, Israel concluded that this was the moment to push harder against what it regards as its only true existential threat – the Iranian regime and, even more importantly, its nuclear and missile capabilities. The war, then, is not merely retaliatory. It is strategic. Israel believes time has opened a narrow window in which Iranian power can be set back by years. Iran, for its part, sees the fight in equally existential terms.That is what makes the conflict so dangerous. Both sides believe they can absorb pain. The true uncertainty lies not in Tehran or Tel Aviv, but in Washington. Israel cannot sustain such a campaign without American support. Iran knows this too. Hence its strategy has shifted towards imposing economic costs on the United States and its allies rather than pursuing only direct military escalation.</p><p>That has profound implications for the Gulf. One of Mr Chaudhuri’s sharper insights was that the most immediate vulnerability may not be oil production itself, but the economics of movement. Iran does not need physically to shut the Strait of Hormuz in order to damage trade. It need only raise the threat level enough for insurers and shipping companies to balk. That, by itself, can disrupt flows, drive up prices and create uncertainty across energy and commodity markets. In this conflict, perception can be as powerful as blockade. For India, the picture is sobering but not alarming. Mr Chaudhuri’s assessment was that there is no direct security threat to India. The concern is economic. Oil, in his telling, is manageable. India has some buffer stocks, global supply remains available and alternative arrangements can be made. The more sensitive areas are LNG, fertiliser inputs such as urea and LPG for households. Here the risks are more immediate, because gas markets are tighter and cooking fuel carries obvious political sensitivity. Beyond energy, other industrial inputs, including sulphur and aluminium, could also come under pressure if the war drags on.</p><p>India’s diplomatic position, meanwhile, has become clearer. New Delhi remains formally neutral, but itsstrategic anchor in the Gulf is now the UAE. That matters. India has conveyed, both publicly and privately, that attacks spilling into the southern Gulf are not acceptable. The war between Israel and Iran may be one thing, but threats to the UAE, with which India has deep economic and strategic ties, are quite another. Perhaps the most consequential part of Mr Chaudhuri’s remarks concerned the larger geopolitical order. America, he argued, is not disappearing overnight, but it is retreating in stages. Each intervention is more reluctant than the last and each commitment more conditional. That leaves middle powers to work more closely with one another. India has already begun to move in that direction, deepening ties with countries such as Japan, France, parts of Europe, Canada and the UAE. In a more fragmented world, such partnerships will matter more. </p><p>His broad expectation was that the war may not endure for very long, perhaps only a few weeks, largely because economic strain and domestic politics in America will begin to bite. Yet even if the fighting subsides soon, the lesson will remain. The old order in West Asia is gone. A looser, harsher and more transactional one is taking its place. For business leaders, that means geopolitical risk is no longer a background concern. It is becoming a permanent line item in strategy.</p>
