On the morning of June 13, 2025, the world woke up to a nightmare scenario that had long been feared but never fully imagined: a direct, full-scale military confrontation between Iran and Israel—two bitter rivals locked in a decades-long cold war—had exploded into open warfare.
Over 12 harrowing days, a storm of missiles, airstrikes, cyberattacks, and retaliatory threats engulfed the region, pulling in the United States and threatening to drag the global economy into its most dangerous crisis in years. This was not just a battle for regional dominance. This was a glimpse into how tightly the world’s security and economy are now intertwined—and how quickly conflict in one part of the globe can ripple through every aspect of global life, from the gas pump to the grocery store, the stock exchange to the skies.
A Flashpoint Ignites: Precision, Provocation, and a Deadly Opening Strike
The conflict began not with a warning, but with a surgical strike. In the pre-dawn hours of June 13, Israeli fighter jets, reportedly operating in concert with cyber support and satellite intelligence, launched a daring and devastating attack on Tehran. The target: the highly fortified Al-Quds military complex, a nerve center for Iran’s elite Islamic Revolutionary Guard Corps (IRGC).
The strike was a masterpiece of military engineering—and a catastrophe of human consequence. Among the dead were several of the most senior commanders in the Iranian armed forces: Major General Hossein Salami, head of the IRGC, and General Gholam Ali Rashid, commander of the central military operations unit and a close strategic adviser to the Supreme Leader. Also confirmed killed were many prominent nuclear scientists, further raising the stakes and sending shockwaves through Iran’s national security apparatus.
What followed was not a pause—but an escalation.
Israel Unleashes Its Arsenal: A High-Tech Blitz Across Iran
In the hours that followed, Israel expanded its operations. Using a blend of stealth F-35 fighter jets, long-range cruise missiles, and swarming drones, Israeli forces hit targets in Isfahan, Shiraz, Tabriz, and elsewhere—crippling military depots, radar facilities, weapons factories, and command centers. Satellite images released later by independent analysts showed plumes of smoke rising from key military-industrial zones that had, until then, been considered impenetrable.
In a sign of how advanced the modern battlefield has become, Israeli forces reportedly used AI-enhanced targeting systems and real-time battlefield analytics to guide their strikes with devastating precision. The aim was not only to weaken Iran’s ability to retaliate, but to send a message: no location was beyond reach.
Iran Responds with Fire: Missiles Rain Down on Israeli Cities
Less than 24 hours later, Iran’s response was as dramatic as it was deadly. At dawn on June 14, the Iranian Revolutionary Guard launched a wave of 110 medium- and long-range ballistic missiles aimed squarely at Israeli population centers—specifically Tel Aviv and Haifa.
This was the largest missile attack in the region’s history. Israel’s Iron Dome and David’s Sling missile defense systems were immediately activated, and while they intercepted around 43% of incoming projectiles, the rest struck their targets, inflicting widespread damage.
Critical infrastructure was hit. The Haifa Port, a vital maritime hub for Israeli trade and energy imports, was partially destroyed. A major power plant serving Tel Aviv was knocked offline, resulting in power outages that affected approximately 30% of the country’s population. Emergency services were overwhelmed, hospitals operated on backup power, and government operations were paralyzed in parts of the country for days.
For the first time in decades, Israel appeared vulnerable to sustained, high-level missile attacks from a state adversary.
The Global Superpower Steps In: America’s Entry Into the Conflict
Just as the region—and the world—grappled with the pace and ferocity of the conflict, the stakes were raised even higher.
On June 22, nine days into the war, U.S. President Donald J. Trump, newly re-elected to a second non-consecutive term, posted a tweet that changed the strategic calculus overnight: “The United States has taken decisive action to ensure peace. All three major nuclear sites in Iran have been neutralized.”
Shortly after, in a nationally televised address flanked by top officials, Trump elaborated. He confirmed that U.S. strategic bombers and unmanned combat aerial vehicles (UCAVs) had successfully struck Fordow, Natanz, and Isfahan—Iran’s most sensitive nuclear development sites. The president declared the mission a “historic success,” adding that American forces suffered zero casualties and had returned “home safe.”
His warning to Tehran was blunt: “If Iran chooses to escalate, our next strike will be bigger, faster, and far more destructive.”
With that declaration, the United States had entered the war.
Economies at War: From Tehran’s Markets to Tel Aviv’s Banks
Beyond the bombs and rhetoric, the true legacy of this conflict may lie in its economic devastation. The 12-Day War introduced the modern world to a fully networked war economy—a scenario where military conflict in one region disrupts systems across continents.
In Iran, the war triggered a collapse of the rial, which lost 40% of its value against major currencies within ten days. Ordinary Iranians saw their savings evaporate, the cost of food and medicine skyrocket, and their access to basic goods shrink overnight.
More damaging, 60% of Iranian oil exports were halted due to the security risks of shipping through the Persian Gulf and the spiraling cost of maritime insurance. For an economy that depends heavily on oil revenues—already strained by international sanctions—this represented a fiscal cliff.
Israel fared little better. The Bank of Israel estimated that the war cost the country $300 million per day in lost productivity, infrastructure damage, and emergency spending. The GDP growth forecast was revised from +3.2% to -1.5%, with sectors such as tech, tourism, and manufacturing hit especially hard. The Tel Aviv 35 Index plunged 25%, triggering investor flight and forcing the government to impose temporary capital controls.
A Global Earthquake: Supply Chains, Oil Markets, and Financial Panic
The war’s impact rippled far beyond the region. Global markets reacted with swift and brutal volatility.
- Oil prices surged to $81.40 per barrel, the highest in over a year, after Iran threatened to shut down the Strait of Hormuz—through which nearly one-third of the world’s seaborne oil passes. While Iran stopped short of executing the threat, its mere possibility sent shockwaves through energy markets.
- The World Trade Organization reported that nearly half of all container ships avoided the Red Sea during the conflict, redirecting through the longer route around the Cape of Good Hope. This added an average of 14 to 20 days to Asia–Europe shipping routes, throwing global supply chains into disarray.
- Air traffic was also disrupted on an unprecedented scale. Iran’s closure of its airspace, combined with flight restrictions over Iraq, Syria, and Jordan, forced airlines to reroute over 1,200 weekly flights, raising costs, increasing delays, and causing a spike in airfares across Asia and Europe.
- The cost of shipping insurance for vessels operating near conflict zones surged by 600%, and the cost of air cargo insurance for high-risk routes jumped 500%, according to Lloyd’s of London.
- Major stock indices plummeted. In Europe, markets fell between 7% and 12%, while in the U.S., the S&P 500, Dow Jones, and Nasdaq all saw multi-day losses. Investors fled to safe havens, driving up gold prices and bond yields.
- The cost of wheat—already elevated due to global climate pressures—rose 20%, raising concerns about food security in fragile states.
Long-Term Consequences: A Development Crisis for the Middle East
While the ceasefire declared on June 25 brought an end to the immediate violence, the long-term impact is only beginning to unfold.
A World Bank report issued days after the ceasefire warned that the 12-Day War would have lasting structural consequences for the region’s development trajectory:
- Israel has redirected $8 billion from healthcare, education, and infrastructure projects to fund military rebuilding and civilian compensation.
- Iran has suspended nearly all modernization projects in its oil and gas sector to cover the losses suffered by the IRGC and meet urgent defense needs.
- Foreign direct investment (FDI) in Egypt, Jordan, and Lebanon has decreased by 35%, and central banks have had to draw on their foreign reserves to cover soaring import bills.
- The risk of regional militarization is growing, with governments across the region under pressure to increase defense spending, even at the cost of social services.
- A new wave of migration looms, driven not by war refugees, but by educated youth fleeing economies unable to support their aspirations.
The War That Changed Everything—Without Changing the Map
Twelve days. Thousands of lives upended. Hundreds of billions lost. And yet, when the guns fell silent, no borders had moved, no regime had fallen, and no real strategic advantage had been gained. What had changed was perception—of risk, of vulnerability, and of how fast the global system can unravel.
The 12-Day War did not start a world war. But it showed us how easily one could happen.
