AN OPENING TO BRIDGE THE GULF

"Wars are not fought with weapons, but with knowledge and understanding.' -Ferdowsi, Persian poet and writer

- RANJAN TANDON Senior markets specialist and author

N the midst of the insistent Ukraine war and the ominous Iran-Israel conflict, volatility prevailed through the year. Uncertainty chased oil prices higher as the conflicts threatened to polarise regional politics and disrupt supplies through the Strait of Hormuz. There exists a wide chasm between perceptions and reality as rational afterthoughts temper valuations. With the route intact, the risk premium was contained.

Tel Aviv's efforts to unseat the present regime in Tehran are reminiscent of a similar agenda decades earlier. The closure of Suez Canal after the Arab-Israel war in November 1956 lasted five months. It had a catastrophic effect on the British and French energy situation. The strategic waterway facilitated two-thirds of Europe's oil movement, and Egypt's nationalisation of this conduit prompted the UK and France to align with Israel in a plan to overthrow President Gamal Abdel Nasser.

West Asia's dominance in oil at that time left no option but international mediation. The disruption had ramifications for Europe and Asia alike. With UN intervention, US President Dwight Eisenhower prevailed upon Britain, France, and Israel to withdraw. The crisis dented British and French influence as it permanently impacted the region's power equation. Nikita Khrushchev's opportune support to Egypt was the beginning of the Soviet Union's friendship with Arab nations, thereby impacting global dynamics for decades.