The ‘Stability-Instability Paradox’ Comes for Markets

Foreign Policy columnists argue that the prolonged U.S.-Iran conflict has settled into an uneasy pattern: airstrikes, stalled talks, and now an economic pressure campaign that Treasury Secretary Scott Bessent has termed an 'economic D-Day.' Markets absorbed a loss of up to 20 percent of global oil production without a broader meltdown, thanks to strategic reserve releases, rerouted supply chains, and Chinese stockpiling decisions made before the war began.

The authors warn this resilience has bred a dangerous complacency, drawing a parallel to the Cold War's 'stability-instability paradox,' in which confidence that catastrophe was unthinkable encouraged riskier behavior below the threshold of full-blown crisis. They caution that surviving one stage of disruption says nothing about whether the next escalation will be absorbed as easily.

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