Prolonged Iran war creating major dent in global economy, Cliff Kupchan says

# Why This Matters A prolonged Iranian conflict would disrupt one of the world's most critical chokepoints for global commerce. The Strait of Hormuz, through which roughly 20% of the world's oil passes, becomes a flashpoint during regional escalation, immediately spiking energy prices and rippling through supply chains from manufacturing to transportation to consumer goods. Beyond energy markets, sustained conflict typically triggers capital flight from emerging markets, strengthens safe-haven currencies like the dollar at the expense of developing economies, and forces central banks to raise interest rates to combat inflation—effects that hit vulnerable populations hardest through job losses and reduced access to credit. For developed economies, while somewhat insulated, prolonged regional instability historically redirects defense spending away from productive investment and creates the kind of policy uncertainty that causes corporations to delay expansion and hiring.