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By Kristian Coates Ulrichsen, Rice University 

The U.S.-Israeli military campaign against Iran took a dangerous turn on March 18, 2026, with tit-for-tat strikes on critical energy infrastructure that amount to the most serious regional escalation since the conflict began.

First, an Israeli drone strike targeted facilities at Iran’s Asaluyeh complex, damaging four plants that treat gas from the offshore South Pars field, which straddles the maritime boundary between Iran and Qatar.

Tehran vowed to retaliate by hitting five key energy targets in Saudi Arabia, Qatar and the United Arab Emirates. Hours later, Iranian missiles caused “extensive damage” to Ras Laffan, the heart of Qatar’s energy sector. Qatar’s state-owned petroleum company said additional attacks on March 19 had targeted liquefied natural gas facilities.

Separate suspected Iranian aerial attacks also caused damage to oil refineries in Kuwait and Saudi Arabia and led to the closure of gas facilities in the United Arab Emirates.

Much attention has been focused on the seemingly unanticipated consequences of the U.S.-Israeli strikes on Iran and the de facto closure of the Strait of Hormuz to international shipping. But as a scholar of the Gulf, I believe that the targeting of energy facilities is close to a worst-case outcome for regional states. Export revenues from oil and, in Qatar’s case, natural gas have transformed the Gulf states into regional powers with global reach over the past three decades, and that is now at risk.

Energy becomes a battlefield

The offshore gas field that lies on both sides of the maritime boundary between Qatar and Iran is the world’s largest reserve of so-called nonassociated gas. This means that the gas is not connected to the production of crude oil and is unaffected by decisions to raise or lower output according to, for example, OPEC quotas.

The field, known as the North Field on the Qatari side and South Pars on the Iranian side, was discovered in 1971. Development of its massive resources began in earnest in the 1980s. Largely because of the field, Iran and Qatar have the second- and third-largest proven gas reserves in the world, respectively.

While Israel attacked gas facilities in southern Iran on the second day of the 12-day war in June 2025, oil and gas infrastructure was largely spared during that earlier conflict. The opening two weeks of the current fighting, however, have seen a significant loosening of the restraints on targeting critical infrastructure.

On March 8, Israel struck oil storage facilities in Tehran, starting large fires and blanketing the capital in plumes of smoke and toxic, so-called black rain. For their part, Iranian officials signaled that energy facilities were on the table as swarms of its drones targeted the Shaybah oil field in Saudi Arabia, the Shah gas field southwest of Abu Dhabi and oil facilities in Fujairah.

One of the seven emirates of the United Arab Emirates along with Abu Dhabi, Fujairah is strategically located on the Gulf of Oman, outside the Strait of Hormuz, with direct access to the Indian Ocean. For this reason, it has grown into an important oil-loading and ship fuel-supplying hub and is the terminus for the Abu Dhabi crude oil pipeline.

Opened in 2012, that pipeline has a capacity of 1.5 million barrels per day, covering more than half of the UAE’s oil exports. Its repeated targeting during the war signifies Iranian intent to disrupt one of the two pipelines that bypass Hormuz. Thus far, the other pipeline, the East-West pipeline from the eastern Saudi oil fields to the Red Sea port of Yanbu, has not been targeted.

But that could quickly change, as early on March 19 Saudi authorities reported that a drone had struck a refinery at Yanbu, while a ballistic missile that targeted the port had been intercepted.

Cascading risks of further energy attacks

On at least four occasions over the past decade, most recently in 2022, Houthi forces in Yemen – who are allied with Iran– struck targets around the East-West pipeline.

And in 2024 and 2025, in defiance of U.S. and Israeli policy in the region, the Houthis led a campaign against shipping in the Red Sea.

So far, the Houthis have refrained from joining the latest war, but they have threatened to do so. Any such actions would cause enormous additional disruption to oil markets.

However, the attack on Ras Laffan in Qatar and the wider threats to other energy infrastructure in the Gulf have the potential on their own to be catastrophic for a number of reasons.

Developed in the 1990s, the industrial city of Ras Laffan is the most critical cog in Qatar’s economic and energy landscape and the epicenter of the largest facility for the production and export of LNG in the world. Fourteen giant LNG “trains” process the gas from the North Field, which is then transported by vessels from the accompanying port to destinations worldwide.

Ras Laffan also houses gas-to-liquids facilities – these convert natural gas into liquid petroleum products – along with a refinery and water and power plants that produce desalinated water and generate electricity. Ras Laffan is quite simply the engine that has powered Qatar’s meteoric growth and rise as a global power broker.

Early reports suggest that the world’s largest gas-to-liquids plant, Pearl GTL, which is operated by Shell, was damaged during the first attack on Ras Laffan, and that the second attack damaged 17% of Qatar’s LNG capacity, with repairs projected to take three to five years. A three-phased expansion to the LNG facilities, which would add a further six LNG trains by 2027, is also likely to be delayed.

The burning Gulf state dilemma

What is clear is that Iranian officials view the Israeli — or American — targeting of facilities in their territorial waters in the South Pars field as sufficient to justify hitting facilities on the Qatari side. That’s even though Qatar forcefully condemned the Israeli strike on Asaluyeh as a dangerous escalation, for reasons that have become all too real.

There lies the nub of the dilemma for Qatar and the five other Gulf states facing the brunt of the backlash from a war they tried to avert through diplomacy.

On my visits to the region in fall 2025, it became clear that many officials in the Gulf viewed the ceasefire that ended the 12-day war as, at best, a temporary cessation of hostilities and feared that the next round of fighting would be far more damaging, for Iran and for the region.

This has now come to pass. An embattled government in Tehran that sees itself in an existential fight for survival has spread the cost of war as far and as wide as it can.

Officials statements from Gulf capitals that have consistently – and correctly – emphasized their direct noninvolvement in the U.S.-Israeli military campaign have fallen on deaf ears in Tehran.

An incident on March 2 that saw Qatar down two Iranian Soviet-era fighters was a defensive measure. The jets had entered Qatari airspace with the apparent intent to strike Al Udeid, the air base that houses the forward headquarters of U.S. Central Command.

However, the scope of Iran’s attacks has gone far beyond military facilities used by U.S. forces and have hit the sectors – travel, tourism and sporting events – that put the region so firmly on the global map.

Nowhere is this more the case than the energy sector that has underwritten and made possible the transformation of the Gulf states over the past half-century, and whose health remains vital to the global economy and supply chains in oil, gas and many derivative products.

If that sector remains firmly in the crosshairs, there’s no telling how intense the regional and global consequences of the ongoing war in Iran may prove to be.

About the Author:

Kristian Coates Ulrichsen, Fellow for the Middle East at the Baker Institute, Rice University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

By Leonardo Macelloni, University of Mississippi 

You may be hearing a lot lately about critical minerals and rare earth elements. These natural materials are essential to industry and modern technology – everything from cellphones to fighter jets.

They include lithium and cobalt used in batteries, neodymium for magnets in motors and hard drives, and rare earths that are essential in defense systems, lasers and medical imaging. Critical minerals are also indispensable for renewable energy systems, energy storage and digital infrastructure. Without them, modern society – and any realistic path to a world with net-zero emissions – would not be possible.

A mechanical claw holds a polymetallic nodule, one of several seafloor sources of critical minerals.
ROV-Team/GEOMAR via Wikimedia, CC BY

Critical minerals get their name because they’re also highly vulnerable to supply chain disruptions from global events, trade tensions or economic instability. And, today, one country dominates many critical mineral supply chains: China.

With that in mind, many governments are looking for alternative sources of critical minerals, and several companies are eyeing the ocean floor as a potential new frontier for mining them.

As a marine geologist, I know the potential for seafloor minerals is vast. But that doesn’t mean those minerals are easy to harvest. They come in several forms, from potato-size rocks scattered on the seafloor to seafloor crusts at hydrothermal vents and underwater brine pools. And they are often found in sensitive locations that are home to fragile marine life, raising questions about damage to some of the least explored and least understood parts of our planet.

Polymetallic nodules on the seafloor

When you picture seafloor mining, polymetallic or manganese nodules are probably what come to mind.

Rock-like nodules are about the size of potatoes and are found scattered on vast deep-water plains, typically 3,000 to 6,000 meters deep, in several regions, including a large area of the Pacific Ocean southeast of Hawaii.

They primarily consist of manganese and iron, though they can contain significant amounts of other metals, including valuable nickel, cobalt, copper and small amounts of rare earth elements and platinum.

Nodules form from metals that get into the ocean through erosion or from seafloor hydrothermal vents in volcanically active areas. The metal ions attach to a nucleus, such as a rock or shell fragment. Over time, layers form around that core. The growth is very slow – only a few millimeters in a million years – so larger nodules can be several million years old.

More than 17 exploration licenses exist, primarily in the Pacific’s Clarion-Clipperton Zone. Tests there have involved suctioning nodules from the seafloor to ships above. But, as of early 2026, full-scale, commercial mining has not yet begun.

Seafloor massive sulfides at hydrothermal vents

Another source of critical minerals is seafloor massive sulfides, which form near hydrothermal vents along oceanic ridges. Volcanic activity reacts with seawater, fueling bursts of marine life at these vents, and also forming rocks rich in copper, gold, zinc, lead, barium and silver.

These hot springs form where water rises through the oceanic crust at high temperatures, up to about 750 degrees Fahrenheit (400 degrees Celsius). The metals contained in these solutions precipitate on contact with the cold, oxygen-rich seawater, forming the ventlike structures known as “black smokers” because they look like factory chimneys.

The technology for mining these deposits is currently being built. The first deep-sea tests were performed by Japanese miners in their coastal waters.

Cobalt-rich crusts at seamounts

Ferromanganese crusts are another source. They form on the slopes and summits of underwater mountains known as seamounts and contain manganese, iron and a wide array of trace metals such as cobalt, copper, nickel and platinum.

Over millions of years, metals in the surrounding seawater form coatings of iron and manganese oxides, with thicknesses ranging from a few millimeters to a few decimeters, depending on the age of the seamounts.

Crust mining is technically much more difficult than nodule mining. Nodules sit on soft sediment. Crusts, in contrast, are attached to substrate rock. For successful crust mining, it would be essential to recover the crusts without collecting too much substrate, which would dilute the ore quality.

However, little is known about the marine life found on seamounts, particularly those in the most likely regions for crust exploration and mining.

Underwater brine pools

Another possible ocean source of lithium and potentially rare earth elements may lie in unusual underwater lakes called hypersaline brine pools. These salty pools are found on the seafloor in several parts of the world, but they are especially common in the Gulf of Mexico.

Brine is already the source of much of the lithium used today. Companies extract it from salty water produced during oil and geothermal operations.

Lithium becomes concentrated in brines over millions of years. As water moves through deep rocks, minerals dissolve along the way and elements like lithium can accumulate.

Extracting lithium from deep-sea brines, if it is confirmed to be there, could be more straightforward than traditional seabed mining. Technologies already exist to separate lithium from salty water.

In the Gulf, this approach could potentially use existing offshore oil and gas infrastructure, reducing the need for new construction. The brine could be pumped up, processed to remove lithium, and then returned to the subsurface.

Deep-sea mud

In the Central Pacific Ocean and off Japan, deep-sea mud enriched with rare earth elements and yttrium has been recognized as another new resource.

These deposits form from the very slow accumulation of fish debris, composed of biogenic calcium phosphate, in the deepest parts of the ocean. In 2026, a Japanese research vessel successfully drilled and retrieved deep-sea sediment containing rare earth minerals from the seabed near the island of Minamitorishima, and the Japanese government announced a deep-sea mud extraction trial would begin in 2027.

The drawbacks for marine life

While these regions likely hold vast resources, scientists know very little about the ecological conditions at the boundary between deep-sea water and seafloor sediments, especially about the microbial communities that live there.

Microorganisms are the most widespread and fundamental forms of life on Earth. They play central roles in ecosystems, nutrient cycles, and the long-term stability of the planet. The potential impacts of mechanically removing nodules from the seafloor – through cutting, scraping or lifting – on these microscopic ecosystems remain largely unknown.

In the Pacific Ocean, an experimental mining test carried out in 1978 was revisited more than two decades later. Even after 26 years, tracks left by mining vehicles were still visible on the seafloor. The disturbed areas had fewer bottom-dwelling organisms and less diversity compared to nearby undisturbed regions. Notably, no detailed assessment of microbial communities was conducted, leaving a significant gap in understanding.

Complicating the issue further, many prospective deep-sea mining areas lie in international waters, beyond the jurisdiction of individual nations.

The International Seabed Authority is responsible for regulating mineral activities in the deep ocean, but there is no global consensus on the rules, safeguards or acceptable risks associated with seabed mining. Some countries, including the United States, are discussing creating their own licenses to mine in international areas, while about 40 others are calling for a mining moratorium until the risks are better understood.

Critical minerals are the invisible foundation of modern life. As interest in deep-sea mining grows, these scientific uncertainties and governance challenges will be central to the debate.

About the Author:

Leonardo Macelloni, Director of the Mississippi Mineral Resources Institute and Center for Marine Resources and Environmental Technology, University of Mississippi

This article is republished from The Conversation under a Creative Commons license. Read the original article.

By Michael Klein, Tufts University 

The “fog of war” refers to confusion and uncertainty on the battlefield and the attendant possibility of fatal error. This principle has a parallel when it comes to the economic consequences of wars as well, especially when they occur in a region that is a chokepoint for the production and shipment of one-fifth of the world’s oil and a third of its natural gas.

Although no one really knows how deeply the ripple effects of the joint U.S.-Israeli strikes on Iran will impair the global economy, the Gulf kingdom of Qatar issued a dire warning on March 6, 2026, that reflects those concerns: “This will bring down the economies of the world,” Qatar’s energy minister said.

As for the U.S. economy, it was already showing signs of weakness. Data released on March 6 showed an unexpected loss in jobs in February.

As an economist, I expect the biggest economic risks of this war to be inflationary pressures and slowing growth due to the rising price of oil. In addition, uncertainty from the “economic fog of war” could make consumers reticent to spend and businesses hesitant about hiring and investing. These conditions will make it challenging for policymakers to steer the economy.

Uncertainty and risks

There is currently, and likely to be for some time, great uncertainty about the length of the war in Iran, the range of countries involved and its costs. All of these factors will determine how much the war hurts economies in the U.S. and across the globe.

We do know there will be disruptions to the supply of oil and liquefied natural gas, which is difficult to ship through the Strait of Hormuz, and from the fiscal costs associated with this military action.

The price of crude oil has jumped by about 25% since the U.S. and Israel began bombing Iran on Feb. 28, which has driven up gasoline prices across the U.S. The majority of oil and liquefied natural gas produced in the Middle East travels through the Strait of Hormuz – but the threat of attack has made travel through this waterway uninsurable, which has brought shipping through this vital passage to a virtual halt.

This is also an expensive military campaign for the United States, which has already seen the loss of aircraft and a depletion of its stock of missiles. Early estimates of the cost of the war were nearly US$1 billion a day.

Challenges managing a supply shock

The 1979 Iranian Revolution also brought about a spike in the price of oil, which was an important contributing factor to the United States and Europe experiencing an economic phenomenon called “stagflation” – a portmanteau of stagnant growth and high inflation.

This is unlikely to be repeated to the same extent now. Economies are less dependent upon oil and natural gas than they were in the late 1970s and early ’80s. And the U.S. is not beginning the war with a previous decade of high inflation that made it more difficult to reduce price pressures, since expectations of inflation feed into actual inflation.

Still, supply shocks are challenging to address, as the world saw with the COVID-19 pandemic, and policymakers will likely have to make some difficult choices that involve hard trade-offs.

Trade-off between fighting inflation or recession

One of the questions arising from supply shocks is whether a central bank should raise interest rates to combat inflation or lower them to offset weakness in the economy and rising unemployment. Lifting rates brings down inflation by reducing demand for loans and curbing growth, while lowering rates has the opposite effect.

In both the late 1970s and during the onset of the pandemic, the Federal Reserve opted to keep rates low to help support the economy and the job market. In both cases, this led to a spike in inflation.

The inflation of the late 1970s and early ’80s was brought down by a strong reversal of monetary policy with high interest rates, causing a recession that was, at that time, the deepest since the 1930s. Notably, the reduction of inflation in the wake of COVID-19 did not require a similar economic downturn to achieve that goal. An important reason for that is the long history of low inflation in the decades before the 2020s and the “anchoring” of inflation expectations.

Risks on the horizon

But there are reasons to be concerned.

While the Fed now has a well-deserved anti-inflation reputation, its credibility with financial markets is at risk because of President Donald Trump’s attacks on Chairman Jerome Powell, the prosecution of Federal Reserve Board member Lisa Cook and the appointment of a new chair who many suspect will push for lower rates because that’s what the president wants.

Concerns that these actions could lead to higher inflation can become a self-fullfilling prophecy that brings about the very thing that people are worried about. Seeds of new inflation pressures may be falling on fertile soil.

Uncertainty triggered by the war is not the only negative economic signal. Tariff policy, cuts to government employment, rising federal debt and the possibility of financial vulnerabilities are all weighing on the U.S. economy. A spike in the price of oil could very well set off greater weakness, and even a recession, as consumers and businesses pull back from spending.

About the Author:

Michael Klein, Professor of International Economic Affairs at The Fletcher School, Tufts University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

By Daniele D’Alvia, Queen Mary University of London 

When a conflict escalates, financial markets respond within minutes. That reaction is not just panic or speculation – it is a kind of collective judgement about what might happen next.

The conflict between the US, Israel and Iran, which started on Saturday, triggered a sharp jump in oil prices when Asian markets opened on Monday (rising by as much as 13% amid fears of supply disruption). Major Gulf indices fell steeply, and in some cases trading was suspended amid volatility.

At the same time, investors moved into so-called “safe-haven” assets. Gold prices rose, and demand increased for traditionally defensive currencies such as the US dollar and Swiss franc.

This may sound like distant noise or random financial moves. In reality though, it is one of the clearest signals we have about how serious investors think the situation with Iran could become.

Markets are forward-looking. They do not only react to what has happened – they try to price what they expect will happen. Here’s how to read the signals.

Oil: the first warning light

Oil is usually the first market to move during Middle East tensions. That is because the region plays a crucial role in the global supply of energy. A particular point of concern is the strait of Hormuz, a narrow shipping route through which roughly a fifth of the world’s oil exports pass.

When oil prices jump, it does not mean supply has already stopped. It means traders believe there is a higher risk that supply could be disrupted.

Think of it like insurance. If the risk of damage rises, the price of insurance goes up immediately – even if no damage has yet occurred. Oil markets work in a similar way. Prices reflect the probability of trouble.

Why does this matter? Because oil affects almost everything. Higher oil prices push up fuel costs. Fuel affects transport. Transport affects food prices and goods on supermarket shelves. If oil remains expensive for weeks or months, it can push inflation higher.

So when oil spikes, markets are signalling that they see real economic risk – not just political drama.

At present, the scale of the oil move suggests markets are seriously reassessing the probability of disruption. The crucial question is persistence. If prices stabilise quickly, investors may believe escalation will be contained. If they remain elevated, markets are signalling expectations of prolonged instability.

Bonds: investors looking for safety

The second place to look is the bond market. A bond is essentially a loan. When you buy a government bond, you are lending money to a government in exchange for interest. US government bonds (Treasuries) are widely seen as one of the safest investments in the world.

In times of uncertainty, investors often move their money into these safer assets. This is known as “flight to safety”. When many people buy bonds at once, bond prices go up and their yields (the interest rate that is paid) go down.

You don’t need to follow bond charts every day to understand the message. If investors are accepting lower returns just to keep their money safe, it tells us they are worried.

If oil prices are rising while investors are piling into safe government bonds, markets may be signalling two concerns at the same time: higher short-term prices and weaker economic growth ahead. That is a difficult combination for any economy. Bond markets, in other words, are measuring anxiety.

Stock markets: how long will this last?

Stock markets reflect confidence in companies and economic growth. When shares fall sharply, it often means investors expect profits to be squeezed or business conditions to worsen. But the key issue is duration.

If stock markets fall briefly and then stabilise, investors may believe the conflict will be contained. If losses spread and persist, it suggests markets expect a longer or more disruptive episode.

Markets are not predicting headlines. They are estimating how long uncertainty might last and how deeply it might affect trade, energy supplies and consumer confidence.

Modern financial markets are highly interconnected. A shock in one region can ripple quickly across continents because supply chains, investment funds and large companies operate globally. That is why even a regional conflict can affect pension funds and savings accounts elsewhere.

Equity markets are not judging politics. They are estimating economic consequences.

What this means for markets – and for the conflict

Taken together, oil, bonds and equities provide a temperature check of expectations. Right now, markets are clearly pricing higher geopolitical risk. The sharp initial oil move shows concern about supply. The shift towards safer assets signals caution. Equity volatility reflects uncertainty about the duration of the conflict.

However, markets are not yet behaving as though they expect a systemic global crisis. We are seeing repricing – not collapse. That distinction matters.

As a finance expert, I believe markets are acting as early warning systems. If escalation of the conflict threatens to cause sustained disruption to energy infrastructure or shipping routes, we would expect the oil price to stay elevated, continued safe-haven flows and broader equity declines.

That would tighten financial conditions globally because higher energy prices push up inflation, falling stock markets reduce household wealth and confidence, and increased demand for safe assets raises borrowing costs for business and governments. In other words, credit becomes more expensive, investment decisions are delayed and consumers become cautious. This could slow economic growth.

If, however, tensions stabilise or de-escalate, markets may reverse quickly. Financial systems adjust rapidly when perceptions of risk change.

The broader implication is that modern conflicts transmit economic effects almost instantly through markets. Even before physical supply chains are interrupted, expectations alone can influence inflation, investment and policy decisions.

Markets do not determine the course of a conflict. But they shape the economic environment in which political decisions are made. For now, they are signalling caution – not panic. Whether that caution turns into something more severe will depend less on today’s headlines and more on whether disruption proves temporary or structural. That is what investors are watching. And it is what we should be watching too.

About the Author:

Daniele D’Alvia, Lecturer in Banking and Finance Law, Queen Mary University of London

This article is republished from The Conversation under a Creative Commons license. Read the original article.