Regional impact as US-Iran tensions rise
Regional impact as US-Iran tensions rise
The risk of a war between Iran and the US and its allies is still low. However, we have assessed the significant implications such a conflict – and the path of escalation to it - would have for states across the Middle East.
Four key risk points:
1. Attacks on or clashes between proxies in Syria, Yemen, Iraq, and Lebanon would be the likely theatres for retaliatory attacks between the two sides.
2. Iran would prefer asymmetric attacks and irregular warfare. Cyber warfare would be a significant component of any conflict.
3. Foreign businesses in the Middle East would not be priority targets for attacks, though a conflict scenario would pose significant incidental risks to business operations.
4. A direct military engagement would likely be short-lived and would prompt the international community to push for de-escalation.
Syria has already been an outlet for confrontation between US-allied and Iranian proxies. In a conflict scenario, Syria would be one of the first stages for proxy clashes and retaliation. Syria’s status as an active war zone – and the significant proliferation of weapons within its borders – offers some plausible deniability as cover for both sides to conduct attacks, reducing the risk of further escalation to a direct conflict. Military engagement in Syria has limited implications for the international business or political community, further reducing the risk of escalation.
Israel would be the most likely actor to take action against Iran and its proxies in Syria, as it has an existing track record of doing so. Tel Aviv would launch missile attacks or airstrikes against Iranian interests in Syria, such as areas or buildings controlled by the Islamic Revolutionary Guards Corps (IRGC) or the Iran-backed Lebanese Shia movement Hizbullah. In return, these groups could attack US military interests in Syria or seek to retaliate against US allies in another part of the region – most likely Israel.
Yemen will feature in the early stages of any conflict, given that it has already been the site of tit-for-tat attacks. Forces belonging to Yemen’s rebel Houthi movement (which would be backed by a stepped-up supply of missiles and other materiel from Iran) would likely launch missiles toward populations centres in Saudi Arabia and the UAE. These would primarily target infrastructure, security forces, and government buildings, with mixed accuracy, but some incidental civilian casualties and property damage would be inevitable.
Armed drones from the Houthis would also target infrastructure, primarily in the southern areas of Saudi Arabia, but with some reaching as far north as Jeddah and the capital Riyadh. Drones and remotely driven boats with explosives would target commercial vessels off the coast that are en route to the Bab al-Mandeb strait.
The US and its allies would respond according to the severity of the attack. Strikes on Houthi positions in Yemen by Emirati, Saudi, or US aircraft would be likely, though retaliation on Iranian interests or vessels elsewhere in the region would remain possible. The US would also put increasing pressure on Oman to block any overland smuggling routes from the sultanate to Yemen.
Conflict in Lebanon would involve a confrontation between Hizbullah and Israel which would start in southern Lebanon and northern Israel. While a strike in Lebanon is unlikely to be the opening salvo of a conflict, it would be a natural spill over for increased confrontation in Syria. Hizbullah leader Hassan Nasrallah threatened the US and Israel with retaliation if the US attacked Iran on 12 July.
Israeli attacks would initially target critical infrastructure across Lebanon and Hizbullah military sites and strongholds, with a ground invasion to follow. This would prompt a retaliation from Hizbullah, which would seek to target Israeli critical infrastructure from both Lebanon and Syria. If Israel follows through on recent threats to make no distinction between Hizbullah and the Lebanese government in the context of a conflict, it would also conduct attacks against the Lebanese Armed Forces, which would significantly increase the scale and devastation of any conflict in both countries.
If confrontation between Israel and Hizbullah escalates in Lebanon, militants in the Palestinian Territories would also increase attacks against Israel interests. In Gaza, Hamas, Palestinian Islamic Jihad, and other groups would launch rockets and burning balloon and kite attacks on southern Israel and the capital Tel Aviv. In the West Bank, Palestinians would increasingly seek to conduct stabbings, shootings, and car ramming attacks against Israeli security forces or civilians, as they have done sporadically in the past few years.
Despite Iraq’s best efforts to encourage dialogue and reinforce its neutrality, Iraq would be quickly dragged into any escalation of conflict. Armed groups backed by Iran would target US military or diplomatic sites in Iraq, or attempt to kidnap US citizens in the country. Missiles or other attacks launched from Iranian territory could also target US assets. Any US casualties would provoke a strong US response, possibly directly against military capabilities in Iranian territory. The US would evacuate key diplomatic personnel in Iraq as well as some other citizens working on oil sites, and put pressure on the Iraqi government to bring the operation of Popular Mobilisation Units under control, and potentially sanction some of these units.
Arab Gulf states
In an escalation scenario, the Arab Gulf states would be prime targets for Iranian attacks, though they would build in severity as these are among the most likely to prompt escalation. Initial low-level attacks could include armed drone attacks on infrastructure such as airports, oil and gas pipelines, or ports. US military bases would also be at a high risk of attack. Cyber-attacks by Iran could disrupt the activities of power or desalination plants or attempt to interfere with communications.
None of these acts would cause catastrophic damage as long as they are calibrated correctly – Iran would purposefully avoid acts that could result in significant loss of civilian life. However, the attacks would have a significant impact on the business community. Expatriate residents may depart, and regional tourism would slow to a standstill. Concerns over drones and the potential for missile activity would result in flights being diverted away from hubs in the Gulf.
It remains unlikely that any of these actions in isolation would lead to a full-scale US ground invasion of Iran or conventional war between the US and Iran. The US is unlikely to garner widespread international or domestic support for such a move, and a successful operation would likely require hundreds of thousands of troops. The greater the number of civilian casualties and impact on international business, the more pressure there will be on international actors – such as the EU, China, and Russia – to step in and negotiate a de-escalation.