Geopolitical Implications: Iran-Israel Conflict Could Trigger World War III

By: Prof. Dr. Drs. Ermaya Suradinata, S.H., M.H., M.Si.
Editor: Dhania Puspa Purbasari

AFTER the airstrike on the Iranian consulate in Damascus that killed two generals and five military advisers on Monday (1/04) evening, Iran retaliated.

On Sunday (14/04), Iran launched an attack on Israel using 70 drones, 30 cruise missiles, and 110 ballistic missiles.

The Iran-Israel conflict not only extends the long-standing conflict, but also creates tensions that can affect regional, even global, stability.

In the current geopolitical landscape, the tension between the two countries has become a subject that fuels fears of a possible World War III.

The historical roots of the conflict between Iran and Israel are complex and multifaceted, with differing ideologies, religions and conflicting geopolitical interests in the Middle East region.

Israel, as a Jewish state established after World War II, has been a close ally of the United States and a regional ally in the region.

On the other hand, Iran, a Shia Muslim-majority country, has been a major rival of Israel and the US, with different geopolitical interests, especially regarding regional influence in the Middle East.

Power competition in the region further complicates the situation. Iran supports militant groups in Syria, Lebanon and Gaza, such as Hezbollah and Hamas, which pose a threat to Israel’s security.

Israel has also launched airstrikes against Iranian targets in Syria in response to threats to its security.

The escalation of the conflict between the two countries creates constant tension in the region, with the potential to trigger a larger conflict. The geopolitical implications of the Iran-Israel conflict are thus far-reaching.

Disruptions in global energy supplies could occur as Iran is one of the world’s largest oil producers.

The conflict could also affect the balance of power in the region and trigger the intervention of major powers such as the United States, Russia and China, which could increase the risk of a war in the region, even the world.

As such, the conflict between Iran and Israel has profound geopolitical implications and has the potential to trigger World War III. Preventing further escalation of the conflict and finding a peaceful solution should be the main focus of the international community.

Global economic impact

Meanwhile, the economic implications of the conflict are also significant. An escalation of the conflict could disrupt trade and investment in the Middle East, as well as affect global financial markets.

The impact on the global economy, particularly in the rise of crude oil prices and the weakening of some currencies, shows how serious such tensions are to the stability of financial markets.

If the situation continues to deteriorate, then the impact will not be limited to currency and oil price fluctuations alone, but could also disrupt international trade routes, such as the Suez Canal, which would then have an impact on supply chain instability and the global economy as a whole.

One of the most obvious impacts is the spike in crude oil prices, which has changed the dynamics of energy markets in various parts of the world.

Since the escalation of the conflict, the price of Brent crude oil has jumped from US$77.4 per barrel on 1 January 2024 to US$90.29 per barrel on Monday, 15 April.

Similarly, the price of WTI crude oil has also increased significantly since the beginning of the year.

This rise in crude oil prices not only has a direct impact on oil-importing countries, it also has far-reaching effects on the global economy.

Countries that are reliant on oil imports to fulfil their energy needs face additional burdens in their budgets, which can upset the economic balance and increase inflationary pressures.

In addition, the conflict between Iran and Israel has also led to a weakening of the exchange rates of several currencies. This happens because investors tend to seek refuge in assets that are considered safer, such as the US dollar, during geopolitical tensions.

As a result, currencies such as the Thai baht, Korean won, Malaysian ringgit, and Indonesian rupiah, depreciate against the US dollar.

Thus, a depreciated exchange rate can result in higher prices of imported goods, which in turn can affect people’s purchasing power and overall economic stability.

Significant implications for the region

The impact of the conflict between Iran and Israel also has significant implications not only for Indonesia, but also for the entire ASEAN region.

As ASEAN’s most economically significant member, Indonesia has a key interest in maintaining the stability of its crude oil supply, which is one of the main drivers of the country’s economic growth.

Disruptions in crude oil supply not only impact the industrial and transport sectors, but can also lead to rising energy prices that hurt people’s purchasing power.

In addition, Indonesia has a strong geopolitical interest in maintaining peace and stability in the region. Conflicts in the Middle East, especially between Iran and Israel, could create wider tensions and disrupt regional stability.

As a state that actively engages in regional diplomacy, Indonesia should actively seek to mediate and promote dialogue to prevent conflict escalation that could threaten the security and stability of the ASEAN region.

Therefore, the Indonesian government must immediately take anticipatory steps to deal with potential crude oil supply disruptions due to the conflict.

The first step is to diversify the sources of crude oil supply.

Although the Strait of Hormuz is the main route of crude oil imports for Indonesia from countries such as Nigeria, Saudi Arabia, Angola and Gabon, the government needs to find alternative supply routes that are more secure and reliable.

These steps are crucial to mitigate the risk of supply disruptions and maintain the stability of Indonesia’s economy and the ASEAN region as a whole.

By taking proactive measures, Indonesia can play a more active role in maintaining regional peace and stability, while ensuring national economic and security interests are well protected.

At the same time, the conflict between Iran and Israel brings the world back to the days when military alliances played a central role in global politics.

The rise of these tensions not only conjures up visions of a cold war or even a world war, but also reinforces considerations of the alliances behind each side.

In the midst of these tense geopolitical conditions, Indonesia’s role as a country that seeks to be a bridge between various blocs becomes increasingly important.

The bilateral diplomacy that Indonesia has built closely with various countries over the years is a valuable asset to promote peace and maintain global stability.

As a large and influential country in the Southeast Asian region, Indonesia has a great responsibility in promoting peace and stability at the regional and global levels.

With a rich history in diplomacy and non-alignment, Indonesia has proven itself as a key player in regional and international conflict resolution.

Indonesia’s presence in international forums, such as ASEAN, the UN, and the Non-Aligned Movement, provides a platform for the country to champion the values of peace, justice, and equality.

In the context of the Iran-Israel conflict, Indonesia’s diplomacy can act as a neutral mediator trusted by both sides.

Through close bilateral diplomacy with Iran, Israel and other countries involved, Indonesia can facilitate dialogue and negotiations that can lead to a peaceful resolution of the conflict.

Indonesia can also mobilise support from other countries in the ASEAN region and around the world to support peace efforts.

However, the challenges facing Indonesia in this mediation role are not easy. The complexity of the Iran-Israel conflict and the geopolitical interests involved make the peace process difficult.

So with strong commitment, thoughtful diplomacy, and support from the international community, Indonesia has great potential to play a significant role in resolving this conflict.

At the same time, Indonesia can also utilise the relationships it has built with countries in the ASEAN region and around the world to strengthen conciliatory efforts.

(Prof. DR. Drs. Ermaya Suradinata, SH, MH, MSI, is the former Director General of Sospol of the Ministry of Home Affairs RI, Rector of IPDN, Governor of Lemhannas RI, and currently the Board of Experts for Geopolitics and Geostrategy of BPIP RI.)