GEW Assessment Report
What are the potential consequences if the United States were to respond to Iran following Hezbollah\’s decision to launch a significant attack on Israel as a reaction to the latter\’s actions in Gaza?
The Middle East, a region historically characterised by geopolitical complexities, has witnessed the United States and Iran emerge as prominent actors, frequently entangled in a state of discord. The potential initiation of a military offensive by the United States against Iran would undoubtedly yield far-reaching geopolitical ramifications, extending well beyond the confines of the region and resonating on a global scale. The present paper delves into the potential ramifications of said action and the probable responses of key international stakeholders.
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Tensions persist between the United States and Iran over four decades since the 1979 Iranian Revolution. With Iran making strides in its nuclear programme and diligently training proxy forces across the Middle East, the spectre of violent conflict looms ever present. Ayatollah Ali Khamenei called on Muslim countries to halt food and oil exports to Israel until it ends its bombardments of the Gaza Strip, which have killed more than eight thousand people so far[[1]]. Previously, Foreign Minister Hossein Amirabdollahian appealed to the Organisation of Islamic Cooperation (OIC) to impose an embargo and sanctions and expel Israeli ambassadors; the Gulf Cooperation Council (GCC) secretary-general said no one should use oil as a weapon, while OPEC said it is not a political organisation and has no plans for immediate action on the issue[[2]]. However, everybody knows that in 1973, the oil OPEC embargo was a key weapon in the war. Moreover, economic sanctions imposed by the USA have been a severe weapon in any conflict, either with Iraq, Libya, Iran, Russia, etc. The OPEC\’s refusal to act while the population of Gaza faces genocide is a stain that will stamp it forever.
Military Consequences
The US has a history of retaliating against Iran-linked groups suspected of targeting US forces, aiming to deter future aggression[[3]]. If the US were to retaliate against Iran in this scenario, it would likely target Iranian-backed groups or facilities linked to Iran\’s Revolutionary Guard Corps[[4]]. However, the US has repeatedly stated that any strike response would be directly tied to attacks on its troops and not connected to the war between Israel and Hamas.
Regional Stability
The escalation of violence between Hezbollah and Israel, potentially fueled by US retaliation against Iran, could lead to a broader conflict in the Middle East[[5]]. Iran has built a regional network, including Hezbollah, and has long supported Hamas, a Sunni Islamic movement committed to resisting Israel and liberating occupied Palestine. If the US retaliates against Iran, it could bring Israel closer to a wider war with a regional coalition. This could further destabilise the region and potentially lead to an intensified conflict[[6]].
Economic Consequences
A lasting conflict between the US and Iran could have wide-ranging implications through broad economic and financial shocks that significantly worsen operating and financing conditions. This could impact areas outside of energy and banks, such as tourism [[7]].
A worsening conflict with Iran would have significant economic implications for the United States itself. Moreover, Iran could attempt to block the Strait of Hormuz, through which 30 per cent of the world’s oil flows, which would raise oil prices globally [[8]].
A protracted conflict could also lead to a downturn in global investor confidence and even a massive new wave of refugees and migrants[[9]].
A protracted conflict between the US and Iran could substantially affect the global economy[[10]]. The spillovers could include, additionally to higher oil prices, a downturn in global investor confidence, and even a massive new wave of refugees and migrants[[11]]. Moody\’s has warned that any sustained clashes could have global economic repercussions, particularly through its effect on oil prices[[12]]. Furthermore, the rising risks to economic stability in the Middle East and North Africa (MENA) region could lead to sobering difficulties for the countries involved, Europe and the international community, including even more increased refugee flows and potential economic crises[[13]].
While the US has the military capability to retaliate against Iran, such action could have significant implications for regional stability, refugees and migration flows and the global economy.
Scenarios
Here are the foreseeable scenarios summarising the analysis:
Immediate Regional Consequences:
Proxy Wars Heat Up: Iran wields enormous power over several Middle Eastern militias and groups, notably Hezbollah in Lebanon, the Houthi rebels in Yemen, and specific forces in Iraq and Syria. In the event of an American strike, these groups may step up their operations against US partners in the region.
The Strait of Hormuz, a critical waterway that transports a large amount of the world\’s oil supplies, might become a flashpoint. Iran could try to close or threaten the strait, causing a worldwide oil crisis and soaring prices.
International Allies and Their Probable Positions:
Russia: Historically an Iranian friend, Russia would almost certainly denounce any unilateral US action. While a direct military conflict with the United States is improbable, Russia may aid Iran with intelligence, weapons, and other sorts of assistance.
China: Iran is an important strategic partner in China\’s Belt and Road Initiative. While China would likely avoid direct military engagement, it would almost certainly use its diplomatic and economic weight to dissuade further escalation.
European Union: Having committed substantial diplomatic efforts in the Iran nuclear deal (JCPOA), the EU would almost certainly urge for de-escalation and may strive behind the scenes to arrange a ceasefire or peace agreement.
Turkey: With its own regional ambitions, Turkey would be wary of a power vacuum or additional instability in the region. It may take a public impartial attitude while acting to protect its interests.
Potential Iranian Countermeasures:
Cyber Warfare: Iran is developing its cyber capabilities. It may react by attacking American infrastructure, financial institutions, or other crucial sectors.
Regional Destabilisation: In addition to its proxies, Iran may encourage Shia populations in other nations, perhaps sparking uprisings or additional sectarian bloodshed.
Nuclear Ambitions: An attack could force Iran to accelerate its nuclear programme, citing the need for defence.
Conclusion:
A US war on Iran would be a geopolitical earthquake with global repercussions and backlash. The Middle East\’s dense network of alliances, interests, and historical enmities means that every move can have unforeseen and far-reaching implications. Diplomacy, communication, and understanding remain the most effective weapons for keeping such a situation speculative rather than real.
References
[1] Reuters. “Iran’s Khamenei Urges Muslim Countries to Boycott Israel,” November 1, 2023. https://www.reuters.com/world/middle-east/irans-khamenei-calls-upon-muslim-countries-boycott-israel-2023-11-01/.
[2] Elwelly, Elwely, and Ahmad Ghaddar. “OPEC Plans No Immediate Action after Iran Urges Israel Oil Embargo, Sources Say.” Reuters, October 18, 2023. https://www.reuters.com/world/middle-east/iran-calls-islamic-countries-sanction-israel-2023-10-18/.
[3] NPR. “U.S. Fighter Jets Strike Iran-Linked Sites in Syria after Attacks on U.S. Troops,” October 27, 2023. https://www.npr.org/2023/10/27/1208968397/us-strikes-syria-iran-linked-sites-retaliation.
[4] Baldor, Lolita C. “US Fighter Jets Strike Iran-Linked Sites in Syria in Retaliation for Attacks on US Troops | AP News.” AP News, October 28, 2023. https://apnews.com/article/syria-airstrikes-iran-revolutionary-guard-af3c7a0f069b8c8b08f6feaa0e165d6a.
[5] Ciorciari, John. “The Israel-Hamas War Deepens the Struggle between US and Iran for Influence in the Middle East.” The Conversation, n.d. https://theconversation.com/the-israel-hamas-war-deepens-the-struggle-between-us-and-iran-for-influence-in-the-middle-east-215852.
[6] Nashed, Mat. “‘This Is Nasrallah’s Moment’: Will Hezbollah’s Chief Declare War on Israel?” Al Jazeera, November 2, 2023. https://www.aljazeera.com/features/2023/11/2/this-is-nasrallahs-moment-will-hezbollahs-chief-declare-war-on-israel.
[7] Stevens, Pippa. “A Lasting US-Iran Conflict Would Cause ‘broad Economic, Financial Shock,’ Moody’s Says.” CNBC, January 6, 2020. https://www.cnbc.com/2020/01/06/lasting-us-iran-conflict-would-cause-broad-economic-financial-shock-moodys-says.html.
[8] Global Conflict Tracker. “Confrontation With Iran | Global Conflict Tracker,” n.d. https://www.cfr.org/global-conflict-tracker/conflict/confrontation-between-united-states-and-iran.
[9] PIIE. “A Prolonged US-Iran Confrontation May Spark a New Economic Crisis in the Middle East,” January 10, 2020. https://www.piie.com/blogs/realtime-economic-issues-watch/prolonged-us-iran-confrontation-may-spark-new-economic-crisis.
[10] Stevens, Pippa. “A Lasting US-Iran Conflict Would Cause ‘broad Economic, Financial Shock,’ Moody’s Says.” CNBC, January 6, 2020. https://www.cnbc.com/2020/01/06/lasting-us-iran-conflict-would-cause-broad-economic-financial-shock-moodys-says.html.
[11] PIIE. “A Prolonged US-Iran Confrontation May Spark a New Economic Crisis in the Middle East,” January 10, 2020. https://www.piie.com/blogs/realtime-economic-issues-watch/prolonged-us-iran-confrontation-may-spark-new-economic-crisis.
[12] Stevens, Pippa. “A Lasting US-Iran Conflict Would Cause ‘broad Economic, Financial Shock,’ Moody’s Says.” CNBC, January 6, 2020. https://www.cnbc.com/2020/01/06/lasting-us-iran-conflict-would-cause-broad-economic-financial-shock-moodys-says.html.
[13] PIIE. “A Prolonged US-Iran Confrontation May Spark a New Economic Crisis in the Middle East,” January 10, 2020. https://www.piie.com/blogs/realtime-economic-issues-watch/prolonged-us-iran-confrontation-may-spark-new-economic-crisis.
