The Iran War Toll

Trump’s war with Iran: Rallied the Iranian nation behind the regime and took oxygen away from the opposition, which had appeared to have the unpopular regime on the ropes earlier in the year with its demonstrations - perhaps by honoring pledges to support those demonstrating back in January 2026, lives could have been saved. As was, people seem to have died in vain. Failed at its initial aim for regime change but resulted in installing a new, more radical and uncompromising leadership in Iran, bent on revenge against the US and its allies Failed to completely take out Iran’s nuclear program, but perhaps made the regime more likely to go nuclear in the end. Maintaining a program on the threshold of going nuclear but not, failed to act as a deterrent but instead got the regime attacked. Perhaps the message is that only states armed with nukes are safe from attack, and the message to others is to proliferate. The irony is the intervention was aimed at countering nuclear proliferation, but it may well have the opposite effect. By making the war existential in talking about regime change it reduced the bar for the regime to escalate with attacks on Gulf states and closing the Straits. In so doing it has gifted the regime a new deterrence - its ability to cripple the Gulf states, the Straits and the global economy through the use of cheap/low tech drones and missiles; Through its control of the Straits, Iran is likely now to be able to toll/levy charges for passage, generating revenues for the regime. Prior to the war, the Straits offered free passage. Likely the Trump administration will cede a deal to Iran which eases sanctions, eases asset freezes and generates investment flows to further sustain the regime; Pushed oil and energy prices higher, stalling global growth and boosting inflation. Higher inflation will stall policy rate cuts, keeping rates higher for longer, further stalling global growth. Global GDP is going to be lower, meaning the global population is collectively poorer. Drawn-down global strategic oil reserves are increasing the chances of a systemic global shock in the future. Resulted in higher oil and energy prices, which boosted revenues to axis of evil states - Russia, Iran et al. Likely, they bolstered the Russian budget just at the time when in late 2025/early 2026 sanctions were beginning to impact with the Urals oil price discount running at one-third in the early part of 26’, the budget deficit by the end of February at the full year target with Urals down around the 40s a barrel. By bolstering Russia’s fiscal and BOP position it has extended the duration of the war in Ukraine, causing more deaths. The war has depleted finite stocks of critical US missiles, including Patriots and THAADs. These are expensive and time-consuming to replace and are now leaving Ukraine short of air defenses, and encouraging Putin to launch ballistic missile attacks and extend the war. The shortage of air defense missiles leaves the Gulf and the US vulnerable and Taiwan open to attack by China. The war has shown the limits of US military power and exposed a failure to learn from the recent conflict in Ukraine in the use of drones and military technology. The war will encourage enemies of the US, including China, which had already invested heavily in drone tech. The war has left the impression that the US is an unreliable partner and has furthered efforts by key allies to diversify defense ties away from the US This was seen this week with the signing of the Mecca Agreement between Saudi Arabia, Turkey and Pakistan. By such states hedging their bets this weakens US global leverage. Likely we will see similar efforts from allies in Europe – longer term this likely weakens the US network of global alliances and reduces long-term demand for US military kit - as countries move to develop autonomous military industrial capability which could ultimately serve as competition to US product. With the aim of diversifying away from the US, the Iran war will likely further the flight from the US dollar and US risk free assets. Nervousness around the latter move was probably highlighted by the US Treasury move to support the JPY, for fear of forced Japanese selling of US assets. The war has made a lasting peace in Gaza, the West Bank and even Lebanon appear less likely as suspicions on US and Israeli policy in the region have grown. It has made an extension of the Abraham Accords less likely. The war has further undermined US popular support for Israel and likely raises questions over the prior unlimited military and financial backing of Israel by the US. Reprinted from the author’s tashecon blog. See the original here.JOIN US ON TELEGRAMFollow our coverage of the war on the @Kyivpost_official. The views expressed in this opinion article are the author’s and not necessarily those of Kyiv Post. The views expressed in this opinion article are the author’s and not necessarily those of Kyiv Post. Timothy Ash Timothy Ash is a London-based senior emerging markets sovereign strategist for Bluebay Asset Management Company.