There are a lot of things happening on the global arena which might impact and deteriorate consumer confidence. Be it the aggressive actions taken by central banks to cool down the inflation or uncertain economic environment, the markets have seen it all. Now, the prevailing Middle-East tensions have escalated with Iran and Israel War.
Impact of this war has already been felt in the global markets. Nasdaq Composite has seen a fall of ~1.48% in just 5 days and Dow Jones declined ~2.2% in same time period. BSE Sensex has seen a fall of 2.75%, while Nifty 50 fell ~2.45%.
So, let us see what has actually happened in this Iran and Israel War and is it really a beginning of World War 3?
Why Israel and Iran are considered enemies? Understanding the background
Conflict between Israel and Iran has been seen since long. This is because since the Islamic revolution in 1979, Iran has been rejecting Israel’s very existence. Iran has even tried hard to undermine Israel by arming and providing training to anti-Israeli militant groups.
In retaliation, Israel has used its military to disrupt such efforts and to thwart Iran’s nuclear program. Israel has regarded this as an existential threat.
Iran not only seeks Israel’s eradication, but the country’s supreme leader, Ayatollah Ali Khamenei, earlier tagged Israel as “cancerous tumour.” Further, he went on to say that this “will be uprooted and destroyed”.
Israel says that Iran poses an existential threat. This is because of Tehran’s rhetoric, establishment of proxy forces sworn to Israel’s destruction and its financing and arming of Palestinian groups. These groups include Hamas and of Lebanese Shia militant group Hezbollah.
Why did Iran and Israel War escalated?
Iran has said that its bombardment of Israel is in retaliation to 1st April air strike on Iranian consulate building which is situated in Syrian capital Damascus. This attack has said to be killed senior Iranian commanders.
Iran has blamed Israel for this air strike. Apart from this, the country also sees this as violation of its sovereignty. As reported by BBC, around 13 people were killed. This casualties included Brig Gen Mohammad Reza Zahedi – which was a senior commander in Quds force.
Iran released drones and missiles to Israel after vowing retaliation for the deadly strike on Iran’s consulate in Syrian capital Damascus. While Israel has not confirmed that it carried out consulate strike, speculations are that they have been behind the strike.
It’s the first time that Iran attacked Israel directly. Earlier, Israel and Iran have been engaged in a shadow war. This means that they have been attacking each other’s assets without taking the responsibility. Such attacks have been ratcheted up in current war in Gaza which was sparked by Palestinian group Hamas’ assault on Israeli communities. This took place in the last October.
Allies of Iran
Iran developed a network of allies and proxy forces in Middle East. The country says that they form part of “axis of resistance” which challenges the US and Israeli interests in that region. Iran supports them to a great extent.
Syria is being regarded as Iran’s most important ally. Iran, together with Russia, supported Syrian government of Bashar al-Assad in surviving country’s decade-long civil war. Hezbollah in Lebanon has been categorised as the most powerful of armed groups which is backed by Iran.
Iran lends support to numerous Shia militia in Iraq that have attacked the US bases in Iraq, Syria and Jordan through rocket fire. However, the US then retaliated after 3 soldiers got killed at military outpost in Jordan. In Yemen, Iran backs Houthi movement, that controls most populated areas of the country.
To exhibit support for Hamas in Gaza, Houthis fired missiles and drones at Israel. They had also attacked commercial shipping near the shores. The US and UK struck Houthi targets in retaliation.
How Iran and Israel War can lead to World War 3?
Attack by Iran on Israel led to worries and several reactions from the global leaders and experts. These experts have expressed concerns about the potential for broader conflict. CNBC report mentioned that Colombian President Gustavo Petro warned about potential beginnings of World War 3.
He also criticised support of some genocidal actions taken by major powers which focuses on need for immediate peace commitments from the UN (United Nations). The UK defence secretary has stated that world might be moving from a post-war to pre-war world. There can be possible conflicts which might involve global players such as China, Russia, Iran and North Korea in next 5 years.