Strategic Risk Brief: General Update
War duration, oil prices and market manipulation, the Strait of Hormuz, confirmed damage to assets, and likely next targets.
Iran and the USA
US strategy:
The Americans are conducting airstrikes deeper within Iran. Their view is that they have gradually eroded Iran’s defences, destroying their navy, attacking ballistic missile and drone bases in the West and South of Iran, destroying the Iranian air force, and more. America is fighting this as a classic war, targeting enemy command and control, leadership, etc… They view the fall in Iranian attack frequency as a sign of success.
The reality is slightly different: America’s Gerald Ford Carrier Strike Group has refused to cross through Bab al-Mandab, likely due to the Houthi threat. The Ford aircraft carrier itself has reported a fire that burned for 30 hours, requiring to return to Greece for maintenance. The official narrative is that the fire was caused by an issue with laundry facilities; previously, there were rumours that the ship’s sailors had sabotaged the plumbing system, requiring a repair stop in Greece before deployment. The George W Bush CSG is set to relieve the Ford, which has been deployed for ten months, longer than the typical six months.
The Abraham Lincoln Carrier Strike Group is reportedly operating south of Oman, meaning that the Americans are concerned about Iranian anti-ship missile capability. It appears that up to 5000 soldiers are being rushed to the region for a ground operation, perhaps with the intention of seizing the islands at and near the Strait of Hormuz - that appears far less unrealistic than targeting Iran’s oil export terminal hub at Kharg Island. A ground campaign of any size is typically the start of a much larger and lengthier commitment. This was supposed to be a relatively quick air war. A ground campaign will turn it into a quagmire. Recall that one of Osama bin Laden’s goals on September 11, 2001 was to force the Americans into a lengthy ground campaign against the Muslim world.
Despite the trouble in the American strategy, America’s main advantage remains the same: the American homeland is invulnerable, and the Iranians are stuck fighting on their own borders and in their own country, while the Americans are unaffected except economically and politically. The key issue is that the credibility of the entire political system has been shot by the interventions in the Middle East, the 2008 Global Financial Crisis, and the response to COVID-19. Trump was the American voters’ response to these failures. Our view is that a prolonged and expensive war will break the system.
Iranian strategy:
The Iranian rate of fire dropped significantly from the first few days. However, this is the type of war that Iran has prepared for. Iran’s missile and drone cities are underground, with the tunnel entrances and above ground components, such as power, being vulnerable. Therefore, as entrances are destroyed by airstrikes, Iran may be halting attacks from these bases until they are re-opened. Like Hezbollah in 2006, Iran will focus on firing bigger salvoes when it assesses that the war is near its end, to demonstrate the futility of America and Israel’s campaign. If it fails to do so, its ability to spin a victory narrative would be dramatically reduced. In the interim, steadfastness and economising on ordnance used makes most sense, from Iran’s perspective.
Furthermore, Iran has successfully damaged American bases throughout the region, to varying degrees, and with a focus on radars. This has led to a fall in detection times of Iranian attacks. The Americans are sending AWACS aircraft likely to enhance their detection capabilities. Critically, Iran showed Gulf states that the Americans cannot guarantee their security or deter Iran, nor can Gulf states remain neutral. This will force a rethink in Gulf states’ security arrangements, which is itself a success for Iran.
Iran’s plan is for this to be a prolonged war that saps American political will by continuing to pressure the global economy. That the Iranians have not yet attacked critical energy assets like Habshan and Abqaiq oil processing facilities in the UAE and Saudi Arabia shows that Iran is not yet in a desperate position, and that the political leadership remains in charge.
With all that said, however, Iran remains in an extremely unfavourable position: it is a nation state being forced to fight as an insurgency, with its airspace deeply penetrated by the Americans and Israelis. Its prime industrial assets are being destroyed. Its leaders are being killed, though whoever replaces them will be more wily and more committed. It is in a battle for survival. But the Iranians believe they have no choice but to continue, regardless of the losses they take. It is worth recalling that the earlier generation of jihadis took inspiration from Vietnam, and believe that a long and gruelling, albeit uneven war, is the only way to defeat the American Empire.
Duration of the war
The issue is this. Trump wants to declare victory, but, he has not achieved anything lasting: within 18 months of the war ending, we will be back to where we started, exactly as Israel has found itself with regards to Hezbollah.
The longer the war continues, the more of a failure it appears to be if the Islamic regime survives. Moreover, Trump has insulated himself from the anti-Israel, foreign policy realists, and America First elements of his political network. Those who remain around him are Israel First, and will advise him to continue the war just another few weeks or just another few months. Eventually, will it be just another few years?
The Iranians want to convince the USA to leave the Gulf. This will only happen if the Gulf states commit to forcing the Americans out, including by denying them overflight rights. The Americans will not do so willingly. Therefore, unless Iran is thoroughly crushed, with its infrastructure destroyed, this war continues until the Americans give up. And, even then, it is worth recalling Serbia, which withstood 78 days of attack, including the destruction of its chemicals, energy, and other infrastructure. Iran is nineteen times larger than Serbia with fifteen times the population. Serbia at the time did not have Russian military backing, which Iran almost certainly does, especially in terms of communications support, intelligence, surveillance of American assets, and signals intelligence. Moreover, Iran has an open supply line to Russia and China via the Caspian and Turkmenistan.
Therefore, unless an end to the war is negotiated, 78 days is the lowest estimate for the duration of the war. We are now on day 18. American President Donald Trump can declare victory at any time, but this would leave Iran as the dominant player in the GCC and therefore OPEC+, in partnership with Russia. If Trump walks away, Iran may continue to target Israel, turning this into a potential political disaster for Trump. Simply, there is no way out for Trump that does not destroy his political standing. He’s stuck, and sending ground troops will only lead to more ground troops being sent.
