Since its inception, the Policy Center for the New South has been committed to understanding and anticipating the major transformations shaping our world. Grounded in the realities, priorities, and aspirations of the Global South, we strive to provide rigorous, policy-oriented analysis that helps make sense of an increasingly complex and interconnected international environment.
To achieve this mission, we mobilize our experts, researchers, and Senior Fellows across disciplines to examine the economic, geopolitical, social, and strategic forces reshaping global affairs. From the COVID-19 pandemic to food and energy security, from climate change to the reconfiguration of global value chains and international security, we have consistently sought to move beyond the immediacy of events and shed light on the deeper structural dynamics at play.
In this edition, we introduce Hormuz and the Invisible Fractures: The Price of a Distant War, a new volume that reflects that commitment. Although the agreement recently reached between the United States and Iran has eased immediate tensions and reduced the risk of further escalation, it does not erase the structural realities that the crisis has exposed. The events that preceded this crisis remain highly significant and deserve attention not only as a moment of crisis management, but also as a case study in the interconnected nature of contemporary international relations. The volume examines the Strait of Hormuz not only as one of the world’s most strategic maritime chokepoints, but also as a revealing fault line in a changing international order.
The book opens with an introduction co-signed by Dr. Karim El Aynaoui, Executive President of the Policy Center for the New South and Dr. Mohammed Loulichki, Senior fellow at the Policy Center for the New South, setting the intellectual and strategic framework of the volume. It is structured around nine chapters that collectively examine the crisis through multiple lenses, ranging from geopolitics and international security to energy markets, global trade, and the implications for developing economies. The publication is further enriched by a series of maps produced by the authors and researchers at the Policy Center for the New South, providing visual representations of the strategic, economic, and geopolitical dynamics discussed throughout the book.
What is unfolding around Hormuz is not merely a regional crisis. It demonstrates how tensions concentrated in a single corridor can reverberate across continents, affecting energy markets, trade flows, financial stability, and the broader architecture of global interdependence.
Beyond questions of oil flows and maritime security, the Hormuz crisis highlights deeper transformations that are reshaping the international system: geopolitical fragmentation, the weaponization of economic interdependence, the growing fragility of global supply chains, and the uncertainty generated by shifting balances of power. These developments carry particular significance for countries across the Global South, many of which remain especially vulnerable to energy price shocks, inflationary pressures, financial volatility, and disruptions to trade.
Through the contributions gathered in this publication, our Senior Fellows and experts offer multidisciplinary perspectives on the economic, geopolitical, and strategic dimensions of the crisis. In doing so, we seek not only to explain current developments, but also to anticipate their implications for resilience, global governance, and international cooperation.
At the Policy Center for the New South, we believe that understanding the visible consequences of conflicts requires identifying the invisible fractures that sustain them. It is in this spirit that we invite you to engage with the analyses presented in this volume and to reflect on the broader costs of a distant war in an increasingly interconnected world.
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Chapter 1: The lessons of the 40-day war between the United States and Iran are already redefining modern strategy, revealing a total decoupling between tactical superiority and political victory. The most salient effect is of a cognitive nature, opposing Iran’s planning (chess player) to American unpredictability (poker player). By relying on a decentralized mosaic defense and on cost asymmetry, the Iranian regime survived the death of its Supreme. Leader and the destruction of its conventional capabilities. Simultaneously, the conflict highlights the paradox of existential risk: Iran’s ideological resilience allows it to negotiate on equal terms with the world's leading power, eroding the credibility of Western deterrence. Finally, as the situation leads to a hurting stalemate in Islamabad, this war demonstrates the impotence of pure military force to impose a political will, thus opening an unprecedented strategic game.
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Chapter 2: The Iran–U.S.–Israel war of 2026 exposes a shift toward a more fragmented and realist international order. Rather than signaling systemic collapse, the crisis reveals four interconnected fractures: misaligned alliances, divided legal frameworks, changing deterrence models, and a fragile global political economy. At the core of this transformation lies a new logic of power, where control over flows, energy, trade, finance, and data has become as consequential as control over territory. The disruption of the Strait of Hormuz highlights the vulnerability of global energy markets, while the concentration of digital infrastructure around Bab el-Mandeb underscores the risks facing global connectivity. The essay argues that globalization is not reversing, but fragmenting. In this emerging order, resilience, diversification, and the management of vulnerability will define effective statecraft, as interdependence itself becomes a primary arena of strategic competition.
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Chapter 3: This essay explores the significance of the ongoing Iran War for transatlantic relations. It examines the reasons for European ambivalence and, in some cases, outright opposition to Operation Epic Fury. The analysis highlights sharp transatlantic differences in capability, but also gaps in strategic culture and attitudes toward the use of force. Washington has been frustrated by Europe’s stance, and European allies, for their part, are reluctant to join a war they did not choose, and the course of which they have little ability to shape. Transatlantic dynamics with regard to the war must also be understood in the context of multiple disputes on other fronts, from trade to security, and a discourse reinforcing existing anxieties about the future of the relationship. The only clear element is a shared stake in the outcome of the conflict.
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Chapter 4: The ongoing confrontation between the United States, Israel, and Iran extends beyond regional escalation and represents a significant test for an already fragile international order. For China, the crisis directly affects core strategic interests, including energy security, infrastructure investments, and the stability of critical maritime and continental corridors. As disruptions threaten key trade and connectivity routes, Beijing faces growing challenges in safeguarding its economic and geopolitical interests. At the same time, the crisis offers China an opportunity to strengthen its diplomatic positioning as a stabilizing actor in an increasingly volatile global environment. Rather than becoming directly involved in the conflict, China can project itself as a custodian of balance and strategic restraint. The chapter highlights both the vulnerabilities and opportunities shaping China’s role in a rapidly evolving international order.
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Chapter 5: The impact of the recent war in the Middle East is already reaching the Sahel, despite geographic distance. Its most immediate effect is economic, as access to energy and natural resources becomes more difficult and costly. In a region where food security remains a constant concern, higher oil prices are likely to intensify food inflation. This could deepen existing vulnerabilities for populations already exposed to instability and limited access to basic goods. Mining, a key economic activity across parts of the Sahel, may also be affected by rising logistical costs. Operations could face additional constraints due to the limited availability of chemicals required for certain mines. These pressures show how external shocks can quickly affect fragile economies through energy and supply chains. The chapter highlights the interconnected nature of contemporary crises across distant regions. It also shows how conflict can reshape economic conditions far beyond its immediate geographic theater. For the Sahel, the crisis reveals renewed exposure to inflation, disruption, and strategic vulnerability.
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Chapter 6: The outbreak of conflict in the Middle East has triggered a multilayered shock to the global economy and financial markets. The severity of global consequences will depend on the duration of disruptions, particularly to the Strait of Hormuz, and the policy responses of governments and central banks. We address here the transmission channels through which conflict has affected global energy markets, commodity supply and prices, transportation systems, macroeconomic conditions, and financial markets. Rather than focusing only on oil and gas supply, we trace how the disruption in the Strait of Hormuz and related infrastructure has potentially propagated through shipping, aviation, food costs, remittances, inflation expectations, and central bank responses. Although short-term disruptions may produce volatility without structural transformation, prolonged conflict risks leading to stagflation, change of trade patterns, and reshaping global financial dynamics.
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Chapter 7: The war in Iran and the closure of the Strait of Hormuz have served as a stark wake-up call for Africa’s energy sector. Despite being a net exporter of hydrocarbons, the continent remains highly dependent on imports of refined petroleum products such as diesel, gasoline, and jet fuel. This dependence makes Africa particularly vulnerable to disruptions in global petroleum markets and exposes its energy access to external shocks. The continent therefore faces two major energy-related challenges: expanding supply to provide electricity to more than 600 million people, and building greater resilience against geopolitical instability. This chapter argues that achieving both universal access and resilience requires four policy priorities. These include increasing continental refinery capacity and reducing dependence on imported refined products, accelerating the green transition through greater use of solar and wind energy, investing in modern nuclear facilities, particularly small modular reactors, and expanding intra-African trade in energy products to reduce dependence on external regions.
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Chapter 8: This chapter examines the economic impact of the 2026 oil price shock triggered by the Iran war and the closure of the Strait of Hormuz on Morocco, Tunisia, and Egypt. Using a Leontief cost-push model based on OECD input-output tables, it shows how a 20% increase in oil prices spreads through interindustry linkages. The chapter assesses the effects of this shock on value added and employment across the three economies. Its main contribution lies in capturing indirect effects often overlooked by standard partial equilibrium approaches. These effects reveal vulnerabilities in downstream sectors such as agriculture and construction. Morocco, as a pure oil importer, absorbs the full shock, with a value-added loss of 1.6% of GDP and the highest employment vulnerability. Tunisia appears broadly neutral at the national level, but this masks a divide between state revenues and private-sector costs. Egypt records a net national gain due to state-owned oil revenues, while its private sector remains exposed to significant indirect costs.
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Chapter 9: The global economic shock triggered by the February 2026 closure of the Strait of Hormuz caused uneven effects on South America’s mineral economies. The disruption drove Brent Crude sharply higher and created a dual-edged outcome: stronger export revenues for oil and mineral producers, but much higher costs for imported energy, fertilizers, chemicals, and machinery. The balance varies by country, with Brazil facing especially acute fertilizer risks, Chile and Peru exposed to higher mining costs, and oil exporters such as Guyana and Colombia benefiting more directly. This paper argues that the crisis may also weaken global demand through stagflationary effects, limiting the commodity windfall. Long-term gains will depend on policy responses such as stabilization funds, supply diversification, strategic reserves, and greater value addition. The chapter ultimately shows that commodity wealth alone does not guarantee resilience when global shocks disrupt both demand and production costs.
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