The ongoing United States–Israel–Iran conflict has entered a complex and volatile phase, where geopolitical signalling and ground realities are diverging sharply. While US President Donald Trump has indicated that the war could potentially conclude within “two to three weeks,” developments across the Middle East suggest that the situation remains far from stabilised.

The conflict, which began with coordinated US and Israeli strikes on Iran on February 28, has since expanded into a multi-front regional confrontation. The strikes reportedly resulted in the death of Iran’s supreme leader, triggering retaliatory actions and drawing in multiple state and non-state actors. Despite diplomatic hints of de-escalation, continued military activity including fresh explosions in Tehran and strikes on industrial assets points to an entrenched conflict rather than an imminent resolution.

What has changed materially in recent days is not the intensity of the conflict, but the narrative surrounding its potential duration. Trump’s remarks have introduced a layer of optimism into financial markets, briefly easing crude prices and lifting equities in parts of Asia and Europe. However, this optimism appears largely sentiment-driven rather than rooted in tangible de-escalation on the ground.

A critical concern emerging from Trump’s comments is the apparent shift in US posture towards global energy security. His suggestion that countries should “get their own oil,” coupled with a reluctance to ensure the reopening of the Strait of Hormuz, has raised questions about the future of maritime security in one of the world’s most critical oil corridors. This is a significant departure from the traditional US role as a guarantor of global shipping routes.

The Strait of Hormuz remains central to the crisis. Accounting for roughly a quarter of global seaborne crude flows, the narrow passage is currently under Iranian control and effectively disrupted. Naval mines and military activity have halted tanker movement, creating a supply bottleneck that extends far beyond the immediate conflict zone. According toindustry and agency reports, even if hostilities cease, clearing the strait and restoring safe navigation could take weeks.

The disruption is not limited to supply blockages. Shipping markets have reacted sharply, with charter rates for very large crude carriers surging to unprecedented levels. This reflects both physical constraints and heightened risk premiums, including insurance costs and rerouting expenses. Such elevated logistics costs are already feeding into global fuel prices, with downstream effects on inflation across major economies.

From a structural perspective, the energy system faces a lagged recovery cycle. Oil already produced but stranded in storage or anchored tankers will take time to reach markets. Analysts indicate that even under a best-case scenario, it may take several weeks before supply chains begin to normalise. In cases where infrastructure particularly refining or processing units—has sustained damage, the recovery timeline could extend to months or longer.

The situation is further complicated by the widening geographical scope of the conflict. Attacks in Lebanon, drone strikes in Gulf countries, and the involvement of Yemen’s Houthi rebels have created multiple pressure points across key shipping lanes. The Bab al-Mandab Strait, another vital artery for global trade, is now at risk of disruption. A simultaneous blockage of both Hormuz and Bab al-Mandab would represent a severe shock to global energy flows, potentially extending recovery timelines significantly.

The economic impact is already becoming visible. Fuel prices have risen sharply across major markets, with inflationary pressures building in both developed and emerging economies. Several Asian countries have begun implementing emergency measures, including fuel rationing, to manage supply constraints. India, while relatively insulated due to diversified sourcing strategies and strategic reserves, is not immune. Premium fuel segments have already seen price increases, and prolonged disruption could eventually transmit broader inflationary pressures into the domestic economy.

From a market perspective, the current environment is characterised by a disconnect between short-term sentiment and long-term fundamentals. Equity markets may continue to react positively to any of de-escalation, but the underlying supply disruptions and logistical challenges suggest that volatility in energy prices will persist.