The Iran-Israel conflict was a war that began between Iran and Israel on 13 June 2025, as a result of launching a surprised attack by Israel on the crucial Iranian nuclear and military facilities. At the beginning hours of the conflict, the famous Iranian military leaders, nuclear scientists, and politicians were killed by Israeli air and ground forces. However, the air defences of Iran were also damaged, and these attacks made Iran severely retaliated by launching missiles at cities and military sites in Israel. This retaliation caused a lot of destructions in Israel major cities. However, the Iran-allied Houthis in Yemen also fired several missiles at Israel. The United States of America (U.S.A) defended Israel against Iranian missiles and drones. Later on the ninth day of the conflict, the U.S took aggressive action by striking three Iranian nuclear sites. Furthermore, Trump declared an agreement to ceasefire on 25 June 2025 between Iran and Israel. This agreement marked the conflict the "12 Day War". The main objective of this paper is to examine the historical background of the war, causes, and impact of the conflict on the development of the global economy. This paper is a qualitative design, it used secondary methods. The secondary method is based on documents. It adopted inductive thematic analysis for analysing data. The paper’s findings are the impacts that are: Rising oil prices and economic Pressure, Religious and Political Tensions, Red Sea Trade Disruption, Effect on Foreign Investment and Aid, Security Challenges, Diplomatic Pressure on the UN and Global Forums. In conclusion, Iran-Israel conflict needs to be resolved through diplomatic process.