Middle East Faces New Status Quo After Israel Strikes Iran
Uncertainty pushes region in a dangerous direction
For almost one month after Iran launched over 180 ballistic missiles at Israel, the world held its breath. The retaliation was coming, but when and what would it look like? The signals coming from Tel Aviv to Tehran to Washington were conflicting and confusing:
Iran was emptying out Kharg Island, which processes over 90% of Iranian crude oil for global markets.
The US was ruling out strikes on Iranian nuclear or energy infrastructure, while Israel maintained this was still on the table.
Arab states had closed off their airspace to Israel, fearing a repeat of the 2019 Aramco fiasco, when Tehran directed an attack on Saudi Arabia with drones and missiles, taking 50% of Saudi oil production offline.
Depending on what Israel did, Iranians themselves had prepared a range of retaliation plans, including a barrage of 1,000 ballistic missiles on Israel - or no response at all.
With the exception of a few remarks, like by the Israeli defense minister Yoav Gallant, there was silence. Then, a US intelligence leak occurred, reportedly by a US defense department employee, revealing Israeli preparations for a strike, including a remark in the leaked documents that should have garnered more attention: “We have not observed indications that Israel intends to use a nuclear weapon.”
For a brief moment, the Israeli retaliation looked like it had been disrupted.
🎃 HALLOWEEN SALE 🥳
In the early hours of Saturday, Israel’s response came.
In three separate waves, Israeli fighter jets conducted “targeted and precise strikes” against Iranian military targets in an operation called “Days of Reckoning.” The Israeli government informed Iran through backchannels of the incoming attack and warned Tehran not to retaliate. The Israeli operations targeted over 20 sites in Iran, primarily focusing on missile and drone manufacturing facilities and areas that enabled Iran to launch long-range projectiles at Israel - like in April and at the beginning of October.
So far, Iran has reported that four soldiers have been killed, and Iranian military sites have suffered “limited damage.”
Questions are growing as to whether the explosions many heard were the result of Israeli warplanes (measuring around 100) successfully striking Iranian targets. Or whether Iranian missile defense systems intercepted the incoming strikes. Iran has said it reserves the right to respond in a proportional manner but also added that it understands its “responsibility” to regional stability.
This latest episode once again brings the world to the door of the unknown. Everybody is asking the same question: what happens now? But in this, a bigger transformation is being missed. A new status quo has formed in the Middle East, and regardless of what happens next, the writing is on the wall as to where this all leads.
IRAN’S DIVERGENT PATHS
With the geopolitical ball in Iran’s court, there are two paths forward, with two very different outcomes. This is no black-and-white ordeal, as is the case with most geopolitical events. There are many moving parts.
First, Iran can do nothing, including tempering its response in a way that further diffuses tensions. This will be tricky, considering four Iranian soldiers have died, and this is the first time Israel has struck Iran so publicly.
Gauging the mood of the people in Iran is difficult. But, strangely, at this moment, Iran is winning the optical war, as Israel’s strikes were far less significant than the remarks some Israeli and US officials were making over the past three weeks.
Many believed Israel would strike Iran’s nuclear facilities, as Tel Aviv had an opportunity to take any action it wanted after Iran’s ballistic missile strike.
Add to this, remarks of “regime change” in Iran were in the Western spotlight in a way they had not been for decades. Compared to all this, what occurred was far more subdued. This may be on purpose, part of Israel’s own calculations (discussed below).
Second, Iran could view this as quite significant.
Even after three weeks of being able to prepare itself, Israel was still able to penetrate Iranian airspace. This will likely be a big lapse that Iranian state leadership questions the country’s military chiefs about.
Equally important is that the “depth” of Israel’s strikes is yet to be truly understood. Has the Israeli attack partly or wholly changed Iran’s military readiness and capabilities? This is hard to assess. Either, Israel struck non-vital military targets, which signals Tel Aviv’s off-ramp strategy, or Israel struck vital military targets, which signals Tel Aviv’s readiness to clash. Depending on how Iran interprets what has happened, it could take direct action again, once again bringing the Israel-Iran fight to the brink of a bigger explosion.
For now, the ball is in Iran’s court.
Regardless of what Iran does, an old reality has resurfaced in the Middle East. Across the region and the world, Iran’s threats have not been tossed aside. Once again, Iran’s wrath is a big fear.
THE ISRAELI LOGIC
On the other side of the court, the Israeli strategy is equally nuanced and multi-dimensional. Strangely, just as with Iran, there are likely two different mindsets Israel has been operating with.
The first mindset is that Israel is aware of what’s looming if a war breaks out with Iran. This will not be like the operations in Gaza or Lebanon. A war with Iran would become a flashpoint that threatens to draw in the global community in a variety of ways, from military intervention to global trade.
Equally important is that the “economic toll” of Israel’s wars is rising.
According to Israel’s central bank, the operations in Gaza alone will cost the country 250 billion shekel by next year, over $65 billion, or 10% of Israel’s economy. The addition of Iran into BRICS means an attack on Iran would represent an attack on the BRICS bloc, potentially angering economies that Israel relies on, like China (Israel’s second-largest trade partner) or India (Israel’s seventh-largest trade partner).
Alongside all this, Western support for Israel is weakening, as France calls for an arms embargo against Israel, Spain looks to join the South African genocide case targeting Tel Aviv, and even the US threatens military aid if Israel does not make changes within 30 days. A fight with Iran might tip the scales against Israel.
All of this could have caused Israel’s government to choose a limited retaliation that did not result in a major fight beginning.
The second mindset is that Israel is prepared to clash with Iran, and its attack is part of what I refer to as “strategic escalation.”
In war, nations seldom go “scorched earth” at the beginning. Wars sometimes build up over time. Israel may have calculated that Iran will retaliate.
In this first salvo, then, Israel could have targeted that infrastructure that partly enabled Iran to retaliate against Israel in deadly ways. This means that the moment Iran retaliates, Israel can respond more fiercely, knowing that Iran’s strike capabilities have been somewhat diminished.
This makes Israel’s selection of targets particularly interesting: ballistic missile production and launch sites.
This “gels” well with the idea that Israel is preparing for escalation with Iran.
Add to this, Israel knows that Iran has a finite amount of ballistic missiles (estimated to be around 3,000), which are being expended by supplies to Russia (over 200 have been reportedly delivered). Add all these numbers up - 200 for Russia, 180 against Israel on October 1, and 120 against Israel in April - and Iran has already used 500 ballistic missiles, around 16% of its estimated inventory.
If this is Israel’s strategy, then the Middle East is just at the beginning of a serious Israel-Iran fight that has no limits. The first salvo is over. A second salvo may be looming.
NEXT EXPLOSION
With more unknowns than knowns, it is possible that Israel’s “limited strikes” on Iran are the end of this chapter. But, another explosion between Tehran and Tel Aviv will occur in the future.
What might cause it? There are four big minefields that could trigger another episode between the two countries.
Israel going after Houthis: After Hamas and Hezbollah, it is certain that Israel will turn to the Houthis. This has somewhat already begun, as Israel struck Yemen’s port city “Hodeidah.” And as the Houthis launch ballistic missiles at Tel Aviv. But, after the situation with Hezbollah is wrapped up, Israel could turn its attention to Yemen, and a strike that takes out Abdul-Malik al-Houthi, the head of the Houthis, might garner the same reaction from Iran as the strike that took out Hassan Nasrallah, the head of Hezbollah.
Strikes on Iranian government compounds: In April, the flareup between Israel and Iran began after Israel struck an Iranian diplomatic compound in Damascus. Iran viewed this as an attack on its own territory. This would repeat itself as Israel strikes buildings near the Iranian embassy in Beirut. The next operations might hit Iranian government compounds from Lebanon to Syria to Iraq to Yemen, resulting in Iran firing another barrage of missiles and drones at Israel.
Iran’s nuclear weapons progress: More and more assessments put the window for Iran to develop a nuclear weapon in the span of weeks - not months or years. The closer Israel believes Iran is, the more Israel might feel forced to strike Iranian nuclear facilities, a move that will take existing tensions to historic highs.
Operations in Gaza, Lebanon: The continuing Israeli operations in Gaza and Lebanon were used to justify Iran’s attack on October 1st, specifically Israel’s hit on Hezbollah leadership, and separately, Israel taking out the Hamas chief, Ismail Haniyeh, in Tehran itself. The Israeli operations against Hamas and Hezbollah are not over. More strikes are on the horizon, and depending on who is hit, Iran might view this as crossing its own “red lines.”
CUTTING THROUGH NOISE
As the Middle Eastern archenemies clash, the world is caught in the middle. Nobody should make any impulsive or sudden moves or assume that this episode is over and normalcy will (temporarily) return.
There are several big shockwaves that have been generated by this latest clash.
First, America is quickly losing the ability to control geopolitics.
There used to be a time when Washington could stop governments from flicking one another. Now, Washington is struggling to stop governments from swinging at one another. Regardless of whether the US stopped Israel from going after nuclear/oil sites or whether Israel made this choice unilaterally, the situation between Tehran and Tel Aviv is snowballing. Even if both sides walk back, there is increasingly nowhere to “walk back” to. Whatever semblance of peace surfaces is purely temporary until the next outburst, which is all but guaranteed as Israel goes after Iran’s proxies, starting with Hamas, and now Hezbollah, and likely next the Houthis, the latter of which is being aided with targeting data supplied by Moscow.
Second, the Middle East is making decisions around war.
As I’ve said before, the Middle East used to be defined by development, investment, or buzzing cities. But now, there are four wars playing out in the region: Israel-Iran, Israel-Hamas, Israel-Hezbollah, and Israel-Houthis, all of which are interlinked in the background. But something else has started to occur. The Middle East is making big decisions because of war. Arab nations have closed their airspace showing that “sovereign security” is trumping normalization with Israel or alignment with America. This protects these nations (and their economies) from Iran. However, other parts of the Middle East are exposing themselves to war. Many Israeli warplanes traveled through Jordanian airspace to reach Iran, putting Amman in the bullseye of Tehran (once again), as Iran has long sought to destabilize the government in Jordan and replace it with a loyal figurehead, thus encircling Israel.
Third, Iran could unleash geoeconomics on Israel.
Iranian officials had previously discussed closing the Strait of Hormuz depending on Israel’s attack. But, perhaps more significant, is that several Iranian proxies, including groups in Iraq, had warned that oil flows across the Middle East would be disrupted depending on what Israel does. This changes the calculations for everybody. To hurt Israel, Iranian proxies could disrupt global oil trade, causing markets to bleed and major oil importers from China to India to the EU to scream loudly as their own social and economic stability is put at risk. This is a different spin on geoeconomics. To change the status quo in the Middle East (i.e. stop Israel from taking certain actions), Iran could hit the global economy.
Fourth and lastly, the new Axis of Evil is standing together.
The addition of North Korean troops in Ukraine, shows that Western adversaries are not isolated or disconnected. They are increasingly standing together. The more Iran is bogged down, the more support it might find from the likes of Russia and others. This is counter to the prevailing geopolitical logic, that Iran will be isolated the more it collides with Israel. And if the so-called “new axis of evil” is willing to spill blood for each other (i.e. North Korean troops fighting alongside Russian soldiers), then what Moscow or Beijing do for Tehran should not be underestimated. What they do could change the calculations for everybody else.
ACTIONABLE TAKEAWAYS
Israel and Iran are colliding without restraint. An Iranian ballistic missile strike on Israel or an Israeli strike on Iranian military facilities were once purely fictional or part of war games. But this is the new status quo. Israel and Iran are colliding with less and less restraint around what they do. The Saturday attacks are the first time Israel has so publicly struck Iran. It is a new status quo for Iran, for Israel, and for the Middle East.
Global community facing multiple bad options. Stopping Israel could correspond with Iran getting a nuclear bomb. Supporting Israel could cause a powder keg to explode in the Middle East. The world faces no good options in how to approach the Israel-Iran showdown. The only cards that are available are sure to bring in more turmoil and chaos.
Businesses must develop their own geopolitical clarity. Every business operating in the Middle East cannot wait for their governments to provide cover or show them the way. Executives have to develop their own “geopolitical clarity” - cutting through the noise and forging a path - to align with the new conditions and possible threats on the horizon.
Economy and geopolitics are now intertwined. For Israel, the economy is becoming a massive hurdle when it comes to geopolitics. The cost of the wars in Gaza and Lebanon, the threat of global economic spillover if a fight begins with Iran, and the risk of angering India and China, are all compounding or looming. All of these are real calculations that Tel Aviv must take into account. The economy could increasingly define what Israel does geopolitically.
Preparing for the inevitable is now a requirement. The writing is on the wall that Israel and Iran will clash in serious ways - sooner rather than later. Anybody selling ideas of peace or resolution should be treated as a snake oil salesman. The current geopolitical conditions do not beget this. Instead, the amount of differences between Israel and Iran are mounting. Everybody is now tasked with moving pieces and redesigning strategies to prepare for an inevitable clash between the two regional powers.
🎃 HALLOWEEN SALE 🥳
CONCLUSION
After every geopolitical explosion, governments often return to the drawing board. They meet to discuss what has happened, what it means, and what to do next. This applies to the US-China technology war, the Russia-Ukraine conflict, and the Israel-Iran fight.
From Eurasia to the Americas, many governments are convening to map out what Israel’s operations mean and what they point to. While there is much up in the air, what is visible is that the fighting in the Middle East is no longer just between Israel and Iran.
More and more, the world is being pulled into this conflict. First, it was military aid. Then, it was the global economy (i.e. Red Sea trade). Soon, it might be picking sides.
This is the most under-discussed part of the escalating Israel-Iran fight. Slowly, major powers are being engaged and forced to intervene, even if, for now, it is minimal and limited. On a long enough timeline, however, the Israel and Iran fight could become a global affair.
And this leads to an entirely different outlook. Is what is taking place worth the cost? And, with the world’s biggest powers all present, along with their resources, is there no other path that can be walked?
The tea leaves make it clear where this situation is heading. Israel’s strikes might be the end of one chapter or the start of another. But for sure, they are not the end of the story.
A regional war in the Middle East is an event the world should not entertain. But as long as nations hold their breath, and refuse to turn their heads (to the horizon), the winds are pushing everybody in this dangerous direction.
-Abishur/Mr. Geopolitics
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