Mariano Brown
There are many similarities between a military campaign and business management. Both demand decisions amid uncertainty in competitive markets against rivals with limited resources. Corporate strategy aligns organisational goals with operational execution. War objectives translate to strategic goals in business. A theatre of operation is similar to a market or industry, and intelligence equals competitor market information.
Indeed, modern strategic thinking in business has been influenced by military theory and practice. Many modern business practices were derived or perfected during World War II. The pressure to maximise efficiency, solve complex logistical problems and manage scarce resources led to several innovations and inventions that are currently applied to commercial business practice. These techniques involve operations research (data-driven decision-making), logistics and supply chain management, standardised production and quality control, and the invention of new tools such as computing power and game theory.
War is destructive. Military combat aims to destroy anything that aids the enemy’s capacity to fight, including physical (electricity, transportation, water) and electronic (cyberspace) infrastructure. Although rules exist to reduce civilian casualties, they are often broken. Sun Tzu, in The Art of War, contends the best war is one won without fighting and stresses the need to know both the enemy and yourself to evaluate the enemy’s capacity and your ability to respond.
Why is this now important? Because the US and Israel’s attack on Iran is a war of choice that has serious implications for the rest of the world. The Gulf region and the Middle East are critical to the world’s energy supply. In a globally interconnected world, catastrophic events at choke points have far-reaching global impacts.
The US is a global hegemon with the world’s largest economy and the strongest military power. Its military action was initiated on February 28 to achieve what the sanctions did not do: regime change by eliminating Iranian leaders, destruction of Iran’s nuclear programme, and its ballistic missile capacity. This military action required substantial advance planning and coordination from a logistics and supply chain perspective, as well as the anticipation of Iran’s likely response.
Few people will expect Iran to withstand the deployment of US military might and its obvious command of the skies. Further, US sanctions on Iran have been in existence for over 45 years, evolving from asset seizures to a comprehensive, decades-long economic blockade. This weakened Iran but has also forced it to develop strong survival skills. It has developed drone technology and advanced ballistic weapons capability, which it has stored in underground bunkers. In its defence, it has responded by attacking all Gulf states, US allies, whose territories were used to launch an aerial bombardment of Iran. The existence of multiple US bases in Gulf states indicates that they were positioned there, not merely as a form of deterrence, but as reinforcement and advanced deployment in anticipation of the current military action.
By attacking Gulf states hosting US bases—Saudi Arabia, UAE, Qatar, Bahrain, Kuwait, and Oman—focusing on energy and military sites, and closing the Straits of Hormuz, Iran has globalised the conflict with the US and Israel. US planning should have included this likely outcome, and Gulf states would have warned them. The war’s duration now depends on Iran’s ability to sustain drone strikes versus US and Israeli air power.
Approximately 20 per cent of the world’s energy supply comes from the Gulf and passes through the Straits of Hormuz, a narrow 33-mile corridor which is easy to attack but hard to defend. It is the world’s single most strategically important maritime chokepoint. Energy is a key input for all industrial production, and losing 20 per cent of the world’s energy feedstock has immediately impacted commodity and financial markets. South East Asia (China, India, Japan, and Korea) and the European Union would be the hardest-hit areas. Russia and the US are the greatest beneficiaries; Russia because it has spare capacity, and the US from price rises.
The longer this war and the Hormuz blockade persist, the greater the economic fallout: energy costs rise, fuelling inflation, impacting markets, and risking a stagflation-style recession. With no spare production capacity, T&T can only benefit from higher gas prices or by diverting supplies to better-paying spot markets.
But there is also significant downside risk, as the 2026 IMF report notes. Despite the talk, the single largest claim on foreign exchange usage is the import of fuel, not food or cars. Rising international oil prices immediately mean price rises at the pump, as they have in the USA and a larger demand for foreign exchange. Conversely, if international equity markets are negatively affected, so too will the Heritage and Stabilisation Fund, as the portfolio composition is overweighted in equities. It is unclear whether the price increases for LNG and petrochemicals will offset these negative effects.
Given these risks, the central argument is that T&T must take a cautious, disciplined approach to addressing the impact of the fallout from the war against Iran. The country is recovering slowly. The Manatee project is incomplete, and Dragon remains a potential project. Financing for the “Revitalisation Blueprint” from the Middle East is uncertain, if not stillborn, given events there. These developments reinforce the need to work diligently to build other sectors to move away from dependence on the energy sector.
Mariano Browne is the Chief Executive Officer of the UWI Arthur Lok Jack Global School of Business
