The World is in Trouble: 8 Warning Signs Have Already Emerged
Less than two years after Donald Trump was re-elected as President of the United States, the global economy is far from stable. Trump began his administration with several highly controversial policies, starting with the implementation of reciprocal tariffs imposed on many US trading partners, under the pretext of protecting domestic industries and workers.
This policy significantly shook global trade in early April 2025. Consequently, goods entering the US domestic market became more expensive, forcing supply chains to be restructured, while affected nations, particularly China, prepared retaliatory measures.
Uncertainty did not stop at tariff issues. The war between the US-Israel alliance and Iran, which broke out late last February, has opened much larger problems as it significantly disrupts energy supplies and global trade routes.
From these two factors alone, much suffering is already being felt in many countries across the globe. Global inflationary pressures have forced many central banks to begin tightening their monetary policies, which naturally puts economic growth at risk.
Given the current conditions, CNBC Indonesia has summarised the signs indicating that the global economy is currently in a precarious state.
- The Unending Iran War
When the United States and Israel began attacking Iran on 2lar 28 February 2026, the war was expected to be short-lived. The US arrived with the world’s greatest military power, launching airstrikes on various strategic targets, ranging from nuclear facilities and missile storage sites to air defence systems and Iranian military command centres.
Iran’s Supreme Leader, Ayatollah Ali Khamenei, even died on the first day of the war. Washington and Tel Aviv may have hoped such an attack would force Tehran to surrender immediately. However, that hope did not materialise.
Seven months have passed, and Iran has not surrendered. Tehran is also unwilling to accept peace based on the terms set by Washington. Washington can continue to drop bombs on Iranian territory, but Tehran has shown that war can be retaliated against by expanding the battlefield and attacking critical US interests throughout the region.
The war, originally expected to conclude within weeks, has dragged on for months. The fighting is no longer confined to Iranian airspace but has spread to military bases, energy facilities, and Middle Eastern trade routes. It is at this point that the Iran war has begun to become a global issue.
- Three Oil Routes Disrupted Simultaneously
The Middle East map is filled with narrow passages that determine the life or death of global energy trade. One of the most vital is the Strait of Hormuz. This strait separates Iran from Oman and connects the Persian Gulf with the Arabian Sea. At its narrowest point, the distance between the two landmasses is only about 33 kilometres.
However, these narrow waters are traversed by approximately one-fifth of the world’s oil and gas supply. Before the war, oil flow through the Strait of Hormuz reached about 21.6 million barrels per day in the fourth quarter of 2025. After the conflict escalated, the volume plummeted to just 4.9 million barrels per day in the second quarter of 2026.
Saudi Arabia had long prepared an alternative route. Oil from the eastern region can be diverted through the East-West Pipeline to the Port of Yanbu on the Red Sea coast. This 1,200-kilometre route was built so that Saudi Arabia would not be entirely dependent on Hormuz. Its normal capacity reaches 5 million barrels per day and can be increased to approximately 7 million barrels.
When Hormuz becomes difficult to navigate, the East-West Pipeline serves as a lifeline. However, even this lifeline has become a target. Drone attacks have damaged several pumping stations, forcing Saudi Arabia to suspend parts of the pipeline’s operations. Repairs are expected to take six to eight weeks.
The problem does not end there. Oil that successfully reaches Yanbu must still pass through the Red Sea. Ships heading to Asia must sail through the Bab el-Mandeb Strait, a narrow waterway separating Yemen from Djibouti and Eritrea. There, the Houthi group awaits.
The armed group, allied with Iran, has expanded its influence along the Yemeni coast and threatens Saudi Arabian vessels. They have also taken positions on Perim Island, located at the mouth of Bab el-Mandeb. Three Middle Eastern oil routes are now disrupted simultaneously: Hormuz is difficult to traverse, the East-West Pipeline is damaged, and Bab el-Mandeb is becoming increasingly dangerous. If one door closes, supply can usually be diverted through another; this time, almost all doors are problematic.
- Oil Prices Surpass US$100 per Barrel
The oil market did not take long to react. Every missile flying in the Middle East, every ship attacked in Hormuz, and the damage to Saudi pipelines immediately adds to supply concerns.
In trading on Tuesday (15/9/2026), oil prices continued to rise. Brent contracts for November delivery rose by almost 3% to close at US$108.75 per barrel. Meanwhile, WTI oil strengthened by more than 4% to US$105.83 per barrel.
Figures above US$100 are significant not just for oil traders in London or New York. Their movement affects the daily lives of billions of people. Oil powers the ships that carry goods across continents, the planes that transport passengers, the trucks that deliver food, and the machinery that operates in factories.
Fuel is also a component of the production costs for fertilisers, plastics, chemicals, textiles, and various everyday goods. When oil prices rise, these costs follow. Companies may absorb them temporarily, but…