- Iran believes the US is fighting for access to Middle Eastern oil in the ongoing war.
- The US and Israel have launched several airstrikes against Iran over the past few days.
- Iran retaliated by attacking neighboring countries, including their oil installations.
According to reports, the Iranian government has accused the US of being broke and thirsty for Middle Eastern oil. They claimed that America’s roughly $36 trillion debt burden is fueling the ongoing conflict.
Highlighting Vulnerabilities in Global Energy and Finance
This accusation comes a few days after the US and Israel launched multiple airstrikes against Iran, killing its Supreme Leader, Ali Khamenei, alongside his wife and other top government officials. The airstrikes have continued since the weekend, with Iran retaliating by attacking US bases across neighboring nations, causing a rapid escalation of the war.
In the meantime, the trajectory of events so far has highlighted vulnerabilities in global energy and finance amid rising tensions. Iran is the nation with the world’s 4th-largest proven oil reserves. However, it grapples with heavy sanctions that have limited its export access beyond China, causing heightened inflation in the Asian country.
Iran’s Alternative Economy
Notably, the sanctions on Iran’s oil, which had served as the country’s primary trade channel for many years, forced the government to seek an alternative source of national income. Hence, Iran embraced Bitcoin mining and built a $7.8 billion crypto ecosystem to bypass US sanctions.
The Iranian regime converts subsidized electricity into Bitcoin, mining the cryptocurrency and selling it at market prices. It is worth noting that Iran controls an estimated 2%-5% of the global Bitcoin hashrate, which qualifies it as a major player in the cryptocurrency network dynamics.
The War’s Potential Effect on the Oil and Crypto Sectors
Considering the developments of the past few days, the ongoing war could significantly influence the dynamics of the global economy on two major fronts—the dominant oil sector and the emerging cryptocurrency ecosystem.
Iran is already reported to have attacked oil installations located in countries that harbor US bases, causing them to halt production, with a notable impact on the global oil price. Meanwhile, crypto prices have remained relatively stagnant, suggesting investors are relatively inactive and perhaps waiting to ascertain the extent of the war’s impact on the Bitcoin network.
Related: Iranian Crypto Outflows Surge 700% After U.S.-Israeli Strikes
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