Strategic Risk Brief: All-out Energy War?
The Israelis and Americans meant to force Iran to concede on Hormuz by attacking South Pars. Iran's retaliation demonstrates that this is a miscalculation.
On 18 March, Israel, likely flying through Saudi airspace, attacked Iran’s South Pars gas field’s processing facilities. Reportedly, the Israeli-American thinking was that this would signal to Iran their willingness to hit Iranian energy infrastructure and paralyse the Iranian economy, and would therefore convince Iran to back down on the closure of Hormuz.
Within hours, Iran responded by attacking the Ras Laffan industrial zone, which has the main gas processing facility in Qatar, the Pearl Gas to Liquid facility, and Ras Gas, as well as unclear assets in Saudi Arabia.
Critically, Saudi authorities claimed that they had intercepted all four Iranian missiles targeting Riyadh, while video evidence showed that at least two missiles hit their targets, likely involving fuel storage. Similarly, in the UAE, the gas processing facility at Habshan was struck, with the government acknowledging that “falling debris” caused a fire. Moreover, Hezbollah reportedly targeted Ashkelon, where Israel has the Chevron gas processing facility linked to the Tamar field. The precise location of the hit has not been confirmed.
Understanding Iran
The Americans and Israelis do not have an accurate mental model of Iran. As confirmed by both Oman and Britain, the Iranians had made almost every possible concession to the United States during the nuclear talks, (to which the Americans did not even bother to send a technical team). The Iranians were being rational. They understood how destructive an American war would be, and tried to avoid it.
However, when it was obvious to us that the war was starting the next day, the late Iranian Supreme Leader Ali Khamenei remained apparently above ground, in his compound, the location of which was publicly known. Khamenei wanted to be killed, or, in his view, martyred. He calculated, likely correctly, that his death would inspire the entirety of the Iranian armed forces and political leadership, and convince them to wage this battle to the bitter end. The Iranians are now in martyrdom mode. They are no longer rational.
Therefore, rather than de-escalate in the face of threats, which they know the Americans and Israelis can act on, the Iranians will double down. They are all-in.
