The Multiple Costs of the US–Iran War – From Hormuz to Europe and South Asia: The Widening Economic and Political Geography of the Conflict
Wars are decided by those who hold military power, but their costs are increasingly borne by those who have little or no voice in the decisions that start them. The US–Iran war shows this imbalance very clearly. Its economic consequences have gone far beyond the battlefield and have disrupted energy markets, trade routes, food supplies, public finances and investment in the Gulf, Europe, Africa and Asia. The most striking feature of the conflict, however, is not only the size of the damage but its very unequal distribution.
One striking thing about US President Donald Trump’s endorsement of Israeli Prime Minister Benjamin Netanyahu this past week is how isolated he was in making this call. The Israeli Prime Minister has become a widely detested figure worldwide following Israel’s war in Gaza—where Israel committed war crimes. This disdain was clearly on display in New York in September when dozens of diplomats streamed out of the hall during Netanyahu’s speech.
Iran’s New Defense Minister Is a Missile Man, Not a Military Man
Mehrdad Akhlaghi was appointed defense minister in October 2026 by Iranian President Masoud Pezeshkian. He is an unusual choice, as, unlike most of his predecessors, he does not come from a uniformed military background. And his appointment comes arguably at the most sensitive time in the history of the Islamic Republic.
Iran’s Strategic Thinking: Lessons Learned and What Comes Next
The major wars Iran fights become the prism through which its leaders interpret future threats and opportunities. For four decades, Iranian foreign policy has reflected lessons learned from the Iran-Iraq war of 1980-88. Similarly, the US-Israeli wars of 2025 and 2026 will shape how Tehran thinks about deterrence, diplomacy, regional relationships, and the use of military power.
Egypt: How the Iran War Has Affected Egypt’s Calculations
Egypt, which is not party to the war on Iran, has become a target as well as an intermediary in the conflict. As a result, the war has affected Egypt’s future calculations, particularly in three major areas: its economy, its security, and its regional alliances.
Europe did not choose the war with Iran, and most European governments still resist describing themselves as participants in it. But six months of military basing, missile-defense drawdowns, energy shocks, sanctions pressure and planning for possible migration crisis have made that distance harder to sustain.
Algeria and Morocco have long been at odds, but recent diplomatic moves may signal a widening geopolitical split in North Africa. Hosts Alistair Taylor and Matthew Czekaj are joined by MEI Senior Fellow Intissar Fakir to unpack Algeria’s decision to sever diplomatic ties with the United Arab Emirates and Morocco’s warming relations with both the UAE and Israel. They also explore linkages between these diplomatic shifts and the Western Sahara conflict, Moroccan domestic concerns, particularly in light of this week’s elections, as well as broader regional stability.
Turkey has become a major player in Africa, with a particularly strong footprint in the Horn. While economic and energy interests’ matter, one sector now stands at the center of Ankara’s regional activism: defense.
Trump’s South Caucasus Peacemaking Is His Most Successful, but It Remains Unfinished
Of all the fronts in President Trump’s peacemaking agenda, the South Caucasus has delivered the most concrete results. The August 2025 Washington Declaration, signed between Armenia and Azerbaijan and witnessed by Trump, marked an important step toward peace in the region. The two sides initialed a peace agreement and advanced plans to unblock regional connectivity, including through the establishment of the Trump Route for International Peace and Prosperity (TRIPP), which would connect Azerbaijan to its Nakhijevan exclave through southern Armenia. Implementation of TRIPP has since made notable progress, but construction has yet to start. A breakthrough on those two tracks would, in turn, unlock Armenia–Türkiye normalization, transforming a long-fractured region into an area of trade and interdependence.
Wars don’t just end. They get interpreted, reinterpreted, and turned into strategic doctrine. That is what happened after the Iran-Iraq War of the 1980s, a conflict that saw the United States back Tehran’s Iraqi adversaries. The war taught Tehran three lessons it never unlearned: that Washington wants the Islamic Republic gone, that Iran stands essentially alone in the world, and that it cannot survive a direct, overt fight with the U.S. and Israel.
It has become a commonplace for Americans to describe our current war with Iran as stuck in a kind of limbo, neither full war nor real peace. We’re not the only ones. Iraq finds itself caught in a limbo of its own, between America and Iran, between the tolerable and the intolerable, between progress and relapse.
Iraq is emerging as the Middle East’s strategic connector – but can it turn foreign competition into advantage?
Iraqi Prime Minister Ali al-Zaidi is on something of a diplomatic roll at the moment. Having concluded a weeklong visit to the United States on July 19, 2026, during which he charmed President Donald Trump, al-Zaidi is now expected to head to Tehran to do the same with Iran’s new leaders. Trips to Qatar, Saudi Arabia, Turkey and Syria all figure on his itinerary, too.
This report outlines an actionable US roadmap to win in Lebanon, comprising eight chapters of specific policy interventions across the security, economic, and political dimensions needed to secure a sovereign Lebanon, lock in US gains against Iran, and permanently end the Israel-Lebanon conflict.
The oldest peer-reviewed publication dedicated to the study of the modern Middle East, MEI’s flagship journal covers politics, society, and culture in the region.
