In this explosive episode of MacroMatrix, Ethan and Tracy unpack the most dangerous shift in Middle Eastern geopolitics in decades. The covert U.S.-Iran-Israel shadow war has ended. What replaces it is an era of overt confrontation, with global stakes.

Tracy walks us through the chain of escalation—starting with Israel’s precision strikes on Iranian infrastructure, followed by the U.S.-led Operation Midnight Hammer, which deployed bunker-busting bombs on Iran’s nuclear facilities. The result? A shattered Iranian deterrence model and a ticking clock for retaliation.

We explore Tehran’s constrained—but still potent—response options: cyberattacks, proxy warfare, and disruptions in the Strait of Hormuz. With 20% of global oil passing through that chokepoint, even symbolic interference could send prices skyrocketing—and the global economy spiraling into stagflation.

From missile salvos to market signals, from China’s diplomatic positioning to Russia’s strategic opportunism, this episode maps the entire chessboard. We close by examining long-term risks: a nuclear arms race, chronic regional instability, and a permanent geopolitical risk premium baked into every barrel of oil.

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