When does this war end?

Intelligence agencies often think about the future via scenarios, graded in confidence. So before we do that, here’s what’s happened since we left you yesterday…

On the battlefield:

• President Trump says the US is now targeting Iranian minelayers amid reports the regime is trying to mine Hormuz — the US only has four active mine-clearers

• The UAE detected 35 Iranian drones on Tuesday — that’s less than initial waves, but a record ~25% now get through, suggesting a possible interceptor shortage

• And those Ukrainian anti-drone teams we flagged yesterday are due this week.

In the info domain:

• Israel’s Netanyahu has again urged the Iranian people to rise up

• Iran’s hardline parliamentary speaker (Ghalibaf) is ruling out a ceasefire (an attrition strategy generally means erasing any hint of a possible offramp)

• Putin has promised Trump he’s not helping Iran with targeting (he’s lying), and

• Trump’s press secretary has declared it all a “resounding success” (that’s her job).

Beyond:

• Per yesterday’s briefing (and last week’s rumours), the US is now relocating parts of its top THAAD air defence from South Korea to the Middle East. Subject to details, it’s a presumed win for China, which gets its way (less THAAD) without any concession or contrition. And it’s a possible blow for Korea, which endured years of China’s economic reprisals after the US first deployed the system there in 2017. Right on cue, North Korea has now test-fired cruise missiles from its latest warship.

Anyway, let’s explore the trillion-dollar question of when this war might end, starting with…

• This weekend? (5-10% chance)

Let’s say this war ends two weeks after it started — normality doesn’t then kick back in from Monday. Rather, shipping lines need weeks to normalise their ops, oil exporters stuck behind Hormuz need months to restore their output, and insurers likely need months again to restore the pre-war coverage that underpins the entire supply chain.

So even in that optimistic scenario, you’re looking at Brent crude remaining above $80 per barrel through to at least June or July — advanced consumer economies might swallow the temporary shock, but there’ll be more pain for Asia’s Hormuz-dependent markets: Thailand, for example, just ordered mandatory work-from-home for officials.

Meanwhile, a food price shock could last longer: a ~third of the world’s fertilizer exports rely on Hormuz, so we’re already seeing chatter of farmers a) using less fertiliser and/or b) switching from high-nitrogen crops (corn) to others (soybeans). That all risks higher prices lasting through the next harvest and beyond. Higher food prices can also risk a balance of payments crisis for import-dependent nations from Sudan to Sri Lanka.

• End of this month? (25-35%)

Consider what it means in practice if this conflict reaches that 30 day mark: it’s another fortnight of missile and drone strikes further degrading the region’s energy and port infrastructure, driving even deeper insurance fears that’ll take even longer to unwind.

Compound lags mean we could then see oil prices staying higher ($100+) for longer (at least into Q3), and this all starts to embroil more sectors:

• Aviation is already eating pricier fuel and longer detours, with fare hikes hitting…

• Tourism — not just for a Middle East suffering hits to its ‘safe hub’ status, nor even the many destinations routing through it, but broader hits to capacity, plus…

• Petrochemicals are also hurting, with a ~third of global polyethylene exports relying on Hormuz. And that might sound like someone else’s problem until you recall it’s the plastic input for everything from packaging to consumer goods.

Then what about…

• End of next month? (50-65%)

Let’s say the war drags on for a total of 60 days — at that point, it gets hard to find the sectors and economies not hit. Take a quick tour with us:

• Automakers across Europe and Asia start to faceplant into that petrochemical wall above, with plastic, rubber, and adhesive shortages all driving higher prices

• Pharmaceutical players like India (20% of the world’s generics) start to miss solvents and excipients, hitting our supply of antibiotics and paracetamol, and

• Chipmakers in Asia start scrambling for inputs like ethylene-glycol, helium, and speciality polymers, meaning pricier consumer electronics, EVs, and data centres.

And it doesn’t take long for those and many other sectoral woes to bleed out across the broader economy via lower trade, higher inflation, and slower growth.