The possibility of a large-scale multi-theatre conflict — what commentators loosely call "World War III" — has moved from fringe discussion into mainstream strategic conversation over the past three years. Whether any such scenario actually materialises is unknowable. What is knowable is that serious defence trading firms, licensing authorities, insurers, and sovereign buyers are all quietly doing the same exercise: planning for it. This article is a sober look at what trading defence products would look like under those conditions, written from a legal, regulatory, and commercial perspective rather than a speculative or sensational one.
The purpose is not to suggest a conflict is desirable. It is not. The purpose is to think clearly about the industry's obligations, opportunities, and constraints under an operating environment that serious planners must prepare for, in the same way that reinsurers model catastrophic events they hope never occur.
A licensed defence trading company is a regulated intermediary. Its function is to connect certified manufacturers with approved end users, handle the associated export controls, manage end-user certification, coordinate logistics, and ensure that every shipment complies with applicable international arms trade law. It is not a combatant, not a belligerent, and not a policy actor. Its role is procedural — and during any large-scale conflict, that procedural role becomes more important, not less.
Examples of regulated frameworks under which such firms operate include the UAE's defence trade licensing system, the US ITAR and EAR regimes, the EU Common Position on Arms Exports, the UK Strategic Export Licensing Criteria, and dozens of parallel national systems. Every transaction — peacetime or wartime — sits inside this framework. Nothing about a global conflict removes the obligation to operate inside it. If anything, scrutiny intensifies.
Under a hypothetical multi-theatre conflict scenario, several structural shifts would reshape the trading environment. These are well-documented in academic, governmental, and industry planning literature and are not speculative.
1. Demand volume rises sharply across nearly all categories. Ammunition consumption in high-intensity conflict exceeds peacetime production by factors of 10× to 50× depending on calibre. Protective equipment turnover accelerates. Counter-UAV, electronic warfare, and medical supplies see sustained, multi-year procurement waves. Manufacturers cannot scale production overnight; the gap is filled by drawing down global stocks, which in turn increases the role of trading firms able to locate, aggregate, and deliver available inventory across borders.
2. Licensing regimes tighten, but approvals accelerate for aligned buyers. Every major arms exporter tightens scrutiny of destination countries during wartime. At the same time, government-to-government and allied-nation procurement gets prioritised, and processing times for credible buyers frequently shrink rather than grow. Export control authorities redeploy staff to speed aligned-side approvals while aggressively blocking anything that could reach a sanctioned or adversarial party.
3. Insurance and financing structures change. Trade credit insurance on defence shipments to contested zones often becomes unavailable; governments step in with sovereign guarantees or export credit mechanisms to keep aligned supply lines moving. Letters of credit adapt to conflict-zone risk. Freight routing avoids contested corridors, adding time and cost.
4. Pricing pressure is significant. Historical data from every major conflict shows input costs — metals, propellants, energetics, electronic components — rising 30–100% within the first 12 months. Finished product pricing follows. Buyers placing orders on contracts struck before the price spike benefit; those negotiating mid-conflict face sharply higher prices. Long-term fixed-price contracts become rare.
5. Counterparty risk rises. Not every manufacturer survives a conflict. Not every end user remains eligible. Sanctions lists expand. Trading firms must continuously re-verify the entire supply chain — which is why operators based in neutral, well-regulated jurisdictions with robust compliance infrastructure historically play an outsized role during contested periods.
Any consideration of "trading military products during wartime" as a business proposition has to start with a clear statement of what is not on the table. Legitimate defence trading during any conflict — including a global one — requires full adherence to:
Any transaction that cannot satisfy every one of these requirements is not a business opportunity — it is a criminal liability. No reputable firm considers transactions outside this perimeter under any circumstances, conflict or peacetime. This is the non-negotiable baseline.
Serious analysis of the industry's behaviour during the Second World War, the Cold War, the Yugoslav wars, the Gulf Wars, the Afghan and Iraqi theatres, and the ongoing Ukraine conflict shows a consistent pattern. Licensed trading firms operating under neutral jurisdictions — Switzerland, Sweden historically, more recently the UAE and Singapore — played several specific roles:
Sourcing and aggregation. When a buyer in one allied country needed volumes that no single manufacturer could supply, trading firms assembled packages from multiple certified manufacturers across multiple source nations, handling the parallel export licensing. This function becomes disproportionately more valuable during conflict, when no single manufacturer can meet demand from any single buyer.
Logistics and routing expertise. Moving controlled goods through contested airspace, closed straits, or embargoed territory requires specific expertise that most sovereign procurement officers do not have. Trading firms with established freight, customs, and insurance relationships deliver where direct procurement stalls.
Compliance arbitrage — in the legitimate sense. Different source countries have different export control posture toward different destinations. A trading firm with relationships across multiple manufacturing jurisdictions can identify which source country's licensing authority is most likely to approve a specific end-user and configuration. This is not sanctions evasion — it is legitimate use of the patchwork of national regimes.
Counterparty de-risking. Sovereign buyers in wartime often lack visibility into manufacturer production status, alternative producers, component availability, or pricing. Trading firms provide that market intelligence, and in doing so protect both sides from bad transactions.
Setting aside the disaster scenarios and focusing on realistic commercial dynamics: in any large-scale conflict environment, the firms that capture the most value are not the ones chasing spot transactions at elevated prices. They are the ones who locked in multi-year supply relationships before the environment deteriorated.
That means the real strategic question for a licensed defence trader is not "what happens during a conflict" but "what positioning is established now, so that if conditions worsen, the firm is already integrated into allied supply chains, already holds relationships with credentialed buyers, and already has the compliance infrastructure to scale quickly."
Firms that have invested in these capabilities during peacetime outperform significantly under stress:
None of this can be built in an emergency. All of it can be — and is being — built now by forward-looking firms.
The wartime environment is not uniformly positive for the industry. Several risks specifically target defence traders:
Reputational damage from even technically compliant transactions. A shipment that is fully legal, fully licensed, and fully end-user certified can still become a public relations crisis if the equipment is later used in a widely-publicised incident. Firms that want to survive long-term are increasingly selective not just about legality but about alignment with broader principles of restraint.
Rapid regulatory evolution. Sanctions lists change weekly during active conflicts. A transaction that was approvable on Monday may be prohibited by Friday. Firms without real-time sanctions monitoring expose themselves and their buyers to significant liability.
Counterparty deterioration. A manufacturer today can become sanctioned, bankrupt, or simply non-functional tomorrow. Buyers can undergo government changes that render previous authorisations moot. Continuous verification is not optional.
Political exposure. In wartime, defence traders operating from neutral jurisdictions become targets of political pressure from all sides. Maintaining jurisdictional clarity, transparent licensing, and public compliance with international frameworks is essential.
Physical and operational risk. Shipping routes, banking corridors, insurance coverage, and logistics infrastructure all come under strain. Firms dependent on any single route, bank, or carrier are exposed.
Licensed defence traders based in neutral, well-regulated jurisdictions — the UAE, Singapore, Switzerland historically — play a structurally important role during contested periods. These jurisdictions offer:
This is why the UAE's defence trading sector has grown substantially over the past decade and is likely to continue growing under any conflict scenario. It serves a structural need that direct bilateral procurement cannot meet at scale.
The takeaway for any licensed defence trader, procurement officer, manufacturer, or allied-nation buyer is straightforward. Planning for a high-intensity conflict environment is not a speculative exercise — it is a prudent one. The firms that will perform best under adverse conditions are those that:
This is not a get-rich-quick proposition. It is a long-horizon, relationship-intensive, compliance-heavy business that rewards patience, discipline, and strict adherence to the rule of law. Firms that treat it as anything else tend not to survive the full cycle.
Trading defence products during a hypothetical large-scale global conflict is not a business idea to be pursued opportunistically. It is a serious, regulated, professional activity that serves a legitimate function in the international security architecture — provided it is conducted by licensed operators, inside the law, with full compliance and continuous ethical review. For licensed firms already operating under robust national frameworks, the exercise of planning for adverse scenarios is not speculation. It is responsible corporate preparation, no different from the stress tests that banks conduct for financial crises or that insurers conduct for natural disasters.
Licensed defence trading firms operating under the full range of applicable international and national arms trade frameworks limit their work to credentialed government, military, and licensed commercial buyers, with every transaction supported by full export documentation and end-user certification. Firms and sovereign buyers seeking to understand how licensed, compliant defence trading relationships function — particularly in the context of contingency planning — should engage through established professional channels with regulated counterparties in their jurisdiction of choice.