The geopolitical risks of direct military conflict between Israel and Iran are huge, but so are the economic risks if the conflict escalates in the coming days and weeks.

If the conflict widens, Israel, one of America’s closest allies, could be facing a multifront conflict, as it is already engaged in a war in the Gaza Strip and guarding against attacks from Hezbollah, an Iranian proxy based in Lebanon. Depending on the breadth of the conflict, the economic effects could extend to the United States and across the world.