As The Iran War Intensifies, Threats To Oil, Water And Infrastructure Multiply

The scale and ferocity of U.S. and Israeli bombing continued unabated for two weeks, destroying large parts of Iran’s military infrastructure and eliminating many of the regime’s key leaders. For its part, Iran responded by launching its own aggressive offensive operations, using its ballistic missiles and drones to attack U.S. and Israeli military installations as well as basic civilian infrastructure targets throughout the Middle East.

At this point, I think it is possible to highlight several developments that I am watching closely and which, in my experience in government working on global conflicts, will be critical in shaping the trajectory of war in the near term.

The war in Iran intensifies and becomes deadlier

As I observe the dynamics of the battlefield, I am struck by the frequency of air, missile and drone attacks, the targets hit and the scale of the damage caused. Just consider that after just two weeks, the United States and Israel claim to have already struck more than 5,000 Iranian targets, with General Cain, Chairman of the Joint Chiefs of Staff, noting that the goal is to strike “deeper into Iran’s military and industrial base.” Israel, meanwhile, is focusing its strikes on Iranian military and intelligence targets, but also on parts of the country’s oil infrastructure as well as Hezbollah targets in southern Lebanon and Beirut.

Not to be outdone, Iran has launched hundreds of deadly Shahed ballistic missiles and drones at U.S. military installations throughout the region, in Tel Aviv and elsewhere in Israel, as well as at its Gulf neighbors, including the United Arab Emirates, Saudi Arabia, Kuwait, Bahrain and Qatar. The fighting left more than 1,200 people dead in Iran, 13 U.S. service members killed and about 140 others injured, and civilian deaths in Israel, Lebanon and the Gulf states. Unfortunately, this toll is certain to rise as offensive operations continue as the war enters its third week.

Oil markets are on alert

Aside from the obvious human toll of the war, the combination of attacks on oil infrastructure, coupled with Iran’s threats to close the Strait of Hormuz (through which 20-25% of the world’s oil trade by sea passes) for the foreseeable future, is causing wild swings in oil prices, with Brent prices regularly fluctuating between $85 and $120. Iran is also attacking ships near the strait and is reportedly planning to lay sea mines at various points along the narrow waterway to further disrupt traffic.

Not surprisingly, leading economists fear that a prolonged disruption in the global oil market lasting a few months or more could lead to higher global inflation, hurt business investment and trade, slow economic activity in sectors such as auto manufacturing and agriculture, and ultimately trigger a broad recession.

The United States and its potential allies will likely soon try to forcibly open the Strait of Hormuz, which Tehran closed on the first day of the conflict, although efforts to do so will be difficult under Iranian fire. It is estimated that before the outbreak of hostilities, Iran possessed up to 5,000 sea mines, including static mines that remain at various depths and more sophisticated mines (most of Chinese and Russian origin) that lie on the seabed and are launched to the surface by various triggers, including acoustic noise, pressure changes caused by a passing ship, and magnetic signatures.

So far, Iranian officials have officially denied mining in the strait, and the United States has destroyed – as part of its extensive air campaign – many of the largest Iranian ships capable of deploying significant numbers of mines. However, I anticipate that Iran’s Revolutionary Guards will attempt to deploy mines, even in smaller numbers, in the coming days, given the physical and psychological threat they pose to commercial shipping.

Another point: Despite intense fighting and a sharp reduction in most of the region’s oil exports, Iran has surprisingly managed to keep its oil exports at a relatively normal rate, between 1.1 and 1.5 million barrels per day since the start of the conflict. This could help explain at least part of the reason for Tehran’s resilience and provide potential leverage for the United States in future negotiations or military operations (as evidenced by today’s strike against exclusively military targets on Kharg Island, Iran’s vital oil hub).

Critical infrastructure is under siege

There appears to be a trend away from strikes primarily on military targets and defense-related infrastructure, particularly by Iran, in favor of a broader set of targets, including hotels, airports, oil production facilities and desalination plants.

Targeting desalination plants is particularly concerning given the region’s complete dependence on drinking water from these plants. Just consider that recent UN data shows that almost 70% of Saudi Arabia’s drinking water comes from desalination plants. Oman’s is 86%, Kuwait’s 90% and Israel depends on its large coastal desalination plants for almost half of its drinking water.

In my view, it is conceivable that if this war escalates, it could spread and targeting each other’s critical civilian infrastructure would become commonplace, which would be a truly worrying development for the region’s post-conflict recovery.

Air power has its limits

A final trend that is becoming increasingly evident is the inability of U.S. and Israeli air power to achieve many of the campaign’s previously stated objectives. For example, despite quickly suppressing Iran’s air defense systems and establishing air dominance, this aerial advantage has failed to force regime change, incite the population to engage in a new round of widespread anti-government protests, destroy Iran’s remaining stockpiles of enriched uranium, or, at least for now, ensure the free flow of oil across the Strait of Hormuz.

There is no doubt that the combined U.S. and Israeli airstrikes have severely degraded Iran’s traditional military capabilities, damaged missile and drone manufacturing facilities and stockpiles, disrupted regime communications, and increased personal risk for the country’s leaders. But this conflict so far has highlighted the fact that while air power is an essential element of modern warfare, it is most powerful when integrated with other elements of the national military force, particularly ground troops.

No immediate end in sight

Against this backdrop, I would expect some intense fighting over the next few weeks at least, as both sides attempt to gain a decisive advantage. In my opinion, the next looming hot spot will likely be the U.S. effort to forcibly open the Strait of Hormuz if Iran continues to selectively restrict shipping, and I expect this to be a complex operation, especially if Iran decides to deploy mines and launch attacks against U.S. (and potentially European) ships involved in the mine clearance operation.

Other issues I’ll be monitoring in the coming weeks:

• Potential responses from Iran’s proxies, particularly Hezbollah and the Houthis;

• Russia’s reported support for Iran and how it might manifest on the battlefield;

• The role that European countries will play in safeguarding international oil transport;

• The apparent race between Iran’s dwindling inventory of ballistic missiles and (to a lesser extent) drones, and the ability of the United States and Israel to produce enough air defense interceptors;

• The expansion of the Israeli military campaign in Lebanon;

• And any sign that China or Russia is offering to play a mediating role to end this crisis.

I will return as soon as events warrant it.