A regional conflict in Iran is evolving into a protracted war of attrition, mirroring the Ukraine model and triggering a global economic reorientation. This shift is driven by three structural trends: deindustrialization due to high energy costs, re-militarization as the American-led global order weakens, and a rise in mercantilism as nations prioritize self-sufficient supply chains. The United States faces a lack of realistic diplomatic off-ramps because a withdrawal would threaten the petrodollar system and domestic financial stability. While China seeks stability to protect its energy imports, it lacks the geopolitical framework to enforce a ceasefire. Meanwhile, Japan shows strategic resilience compared to a vulnerable South Korea, and Israel emerges as a primary beneficiary through the potential acceleration of the Greater Israel Project. Domestically, Western nations face heightened polarization, potential conscription, and a breakdown in social cohesion as classical institutional foundations erode during this period of sustained global turbulence.
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