Israel-Iran 041824

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Middle East Regional Implications of an Israel-Iran Escalation

Regional involvement Iran’s unprecedented attack on Israel involved the firing of ballistic and cruise missiles directly from Iranian soil at Israel. However, as the attack was underway it became clear that projectiles were also being fired from other countries where Iranian and/or Iran-backed groups operate. The US Department of Defense on 14 April reported having intercepted projectiles targeted at Israel that originated from Iraq, Syria and Yemen, in addition to Iran. Lebanon’s Iran-backed Shia movement Hizbullah also reportedly fired dozens of Katyusha rockets at Israeli military assets in the Israel-controlled, but disputed, Golan Heights. Perhaps even more significantly, other regional states were involved in the immediate response to the Iranian attack. Jordan said its forces intercepted an unspecified – but likely significant – number of the projectiles that were aimed at Israel’s territory, and opened its airspace to Israeli and other jets for interception operations. In parallel, ahead of and during Iran’s attack, Saudi Arabia and the UAE agreed to share intelligence with the US, according to the Wall Street Journal. This response was partly facilitated by recent efforts to improve security cooperation in the Middle East, including through a 2022 meeting that the US convened in Sharm al-Sheikh (Egypt) with its regional central command and officials from Bahrain, Egypt, Israel, Jordan, Qatar, Saudi Arabia and the UAE. Iran’s likely response Iran needs to retaliate, and its response will shape the evolution of the Israel-Iran stand-off. In our most likely scenario, we anticipate that because Tehran does not want an open conflict with the US, it will carefully calibrate its response. In the first instance, Iran is likely to leverage its network of regional proxies to target Israel in cross-border missile and drone attacks, particularly from Syria and Iraq. Over the coming weeks, the IRGC could also seek to carry out a direct operation against Israeli interests outside Israel. For instance, in recent years Iran has targeted alleged Israeli assets in Iraq’s Kurdistan Region. Retaliation against an Israeli diplomatic asset in the region is also possible, though Iran would likely prioritise an in-country low-intensity operation over a cross-border attack. Strikes against US forces and facilities are possible, but less likely given that Iran wants to preserve the effective truce between its proxies and the US in place since February. Even if Iran carefully calibrates its response, tensions are likely to increase over the coming months. Tit-for-tat attacks will continue, with occasional casualties among IRGC ranks and Iran-backed groups stepping up targeting of Israel. However, absent a direct strike on Israel by Iran or an attack causing a large number of Israeli civilian casualties, this would not trigger US involvement and an open conflict. Instead, Washington is likely to seek to contain Israel’s escalatory steps to avoid being drawn into a regional escalation. Meanwhile, diplomatic engagement by Gulf Arab countries with Tehran is likely to continue to mitigate the threat of a broader regional escalation in the coming months. Significantly, Qatar, Oman, Saudi Arabia and the UAE have all condemned the 1 April attack. Israel’s response? Israel is yet to respond to the attack, and the way it chooses to do so will determine the extent to which the current confrontation escalates, and in turn the full extent of regional countries’ exposure. A spectrum of possible response exists. These range from operations that are low on the escalatory scale and are plausibly deniable, such as a cyber attack on critical infrastructure in Iran or strikes against Iranian proxies in the region, to the highly escalatory end of the spectrum, such as airstrikes on strategic military or nuclear sites inside Iran. Regardless of the eventual Israeli response, however, key trends have started emerging in terms of the region’s exposure, with regional countries broadly divided into two groups:

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Iran’s direct cross-border missile and drone attack on Israel on 13-14 April brought the shadow war between the two countries into the open and threatens further regional impacts. In this note, Seerist’s strategic partner, Control Risks considers the attack’s regional implications.

An escalation at the regional level will depend on Israel’s response to Iran, but – even as the region awaits Israel’s response – varying levels of exposure are emerging across the Middle East. Countries that are under significant Iranian influence will face the greatest conflict threats in the coming weeks; Israel is likely to continue to strike Iranian and Iran-backed assets in Syria and Lebanon, and possibly seek to target Iraq and Yemen. Arab countries allied with the West will seek to walk a fine line and avoid picking a side. For now, direct security threats to these countries are limited, but they could grow in the context of a further escalation between Israel and Iran. Finally, businesses will need to prepare for Middle East-wide operational disruption as the aviation sector remains on high alert and for compliance risks as Western powers expand sanctions programmes and step-up sanctions enforcement.

The Iran connection Regional states that are within Iran’s sphere of influence will face significant threats over the coming weeks. In fact, an asymmetric Israeli response that would reduce the risk of a further escalation would be a strike against Iran-backed groups and/or Iranian assets in the region – without targeting high-ranking officers of Iran’s Islamic Revolutionary Guards Corps (IRGC) or Iranian diplomatic assets. Such a course of action would maximise Israel’s chances of retaining Western and regional defensive support and would assert Israel’s intent to continue rolling back the influence of hostile Iran-backed groups in the region. In this likely scenario, key targets would include assets both in Lebanon and Syria, including infrastructure used by Iranian forces and Iran-backed groups. Israel could conduct sporadic and targeted strikes against infrastructure used by both civilians and Iranian interests in the region, including assets in the vicinity of ports and airports used by Iran-linked interests. Importantly, we assess that, should Israel strike dual-use infrastructure, it would likely seek to limit the extent of threats to civilians – particularly in Lebanon. Furthermore, Israel could seek – though somewhat less credibly – to expand its targeting to Iraq and possibly even Yemen, two countries in which it has not conducted sustained airstrike campaigns in recent years. Western regional allies On the other hand, Western allies in the region have sought to avoid being perceived as picking a side. Jordan was careful to portray its participation in interception operations as a matter of national defence. And although Gulf Arab states reportedly shared information provided by Iran about the attack to help prepare interception missions, they denied access to their airspace to US and Israeli jets carrying out interception missions. This balanced approach, along with continued backchannel engagement with Iran on the part of Gulf Arab states, will help contain physical security threats over the coming week, with the most likely threat posed by falling debris following possible further interceptions. Looking further ahead, over the coming months, Arab allies of the West will seek to continue carefully striking a difficult balance. While Tehran likely did not perceive as an act of war Arab Western allies’ support for interception operations in the context of its carefully calibrated and telegraphed 13-14 April attack, any perception that regional Arab states are enabling an Israeli counterattack or are actively blunting Iran’s cross-border response capability over the longer term would raise tensions between Iran and Arab Western allies – particularly Jordan, Saudi Arabia and the UAE. Middle East-wide risks Beyond physical security threats, foreign companies with operations in the region will have to pay particular attention to the likely regular disruption of aviation operations over the coming weeks. Operators have already modified flight schedules, and – depending on the scale of Israel’s response – airspace closures will be likely to occur sporadically and at short notice, particularly over Israel, Iran, Iraq, Jordan, Syria and Saudi Arabia. Furthermore, businesses with exposure to clients, providers and partners in the region will need to ensure they implement stringent sanctions monitoring and compliance mechanisms as Western powers – particularly the US – will be looking to expand the scope of existing sanctions against Iran and its affiliated groups, introduce new measures and step-up enforcement of existing sanctions. Israel’s Western allies perceive such a diplomatic show of force as critical to curtail Israeli intent to engage in escalatory military action. They will be particularly focused on curbing financing of the IRGC and impeding the provision of materials used in the production of drones and – increasingly – of missiles. In the Middle East, the countries that will face the greatest increase in scrutiny in this respect are likely to be Iraq, Lebanon, Syria, Qatar and the UAE. Sources: “What was in wave of Iranian attacks and how were they thwarted?”, BBC ”How the U.S. Forged a Fragile Middle Eastern Alliance to Repel Iran’s Israel Attack”, Wall Street Journal “US and EU prepare fresh sanctions against Iran after Israel attack”, Financial Times Control Risks

Countries where Iran wields significant influence, including through military groups capable of targeting Israel. Countries that are traditionally aligned with the West and supported Israel’s defensive operations on 13-14 April.

Middle Eastern and North African geopolitical groupings Principal status of Middle Eastern and North African states' relations with Israel and Iran. The normalisation of relations with Israel does not indicate endorsement of its policies, nor an aggressive posture toward Iran.

Boundaries and country names shown on this map do not imply endorsement or acceptance by Control Risks or Seerist. Note: Syria, Iraq, Yemen, and Lebanon have not normalised relations with Israel. Map:Control Risks © Control Risks

Israel Normalised (1979) Normalised (1994) Normalised (2020) Interest in eventual normalisation Not Applicable Not normalised Iran Under significant Iranian influence