Iran’s regional foreign policy has been upended, but shipping is still a geopolitical lever
The image displays a large offshore oil platform - multiple pipelines, cranes, and industrial equipment, highlighting the scale of offshore oil extraction operations. Image: Canva
24 February 2025
As the dust slowly settles from last year’s tensions in the Middle East, Iran appears to be the big loser. While it has undoubtedly suffered significant setbacks, its position is not as threatened as it would seem, and Tehran still has cards to play in its broader confrontation with the US.
By Kais Makhlouf, MENA region Analyst
After a series of upsets, Iran’s geopolitical situation is precarious. The policy favoured by Tehran’s hardliners, namely militarising the “Shi’ite crescent” to project power and create deterrence, has been upended.
Iran’s main proxy Hezbollah, built up over four decades, has been bested by Israel, and failed to mount significant resistance to the Israeli invasion in Lebanon in October 2024. Likewise, Iran’s long-term ally Bashar Al Assad has fled Damascus, as none of his allies (including Iran) were able or willing to fight further on his behalf.
The loss of Damascus has undercut a decade of military efforts, invalidating Iranian strategists’ plans for regional deterrence. Iran has undoubtedly lost important elements of its forward defence. But as serious as these losses may be, they are not existential.
Two more threatening propositions are being pushed by Israeli and US hawks: attacking Iran’s nuclear facilities and resuming the Trump policy of maximal pressure. Both policies carry significant risks for the maritime industry.
An attack on Iranian nuclear facilities, wished for by Israel, less so by the US, would seek to destroy facilities in order to set back progress towards a nuclear weapon. This would raise the likelihood of an armed confrontation with Iran, which would likely attack regional oil export infrastructure as a kind of ‘second strike’.
The more likely policy of maximal pressure would see renewed sanctions against Iran, nominally to seek Iranian policy changes. Should the US resume this approach, it would find a much less receptive Middle East. US standing in the region has deteriorated following Trump’s first mandate, and it would likely have to rely on its own assets, without much help from Arab allies – who have grown weary of the US’s mercurial politics.
Therefore, Iran still has cards left to play. The threat of violence against maritime infrastructure, as well as Chinese influence in the Middle East, means that Iran’s fundamental economic interests are somewhat sheltered. Tellingly, Israel never followed up on public threats to bomb Iranian export infrastructure. Finally, within Iran, the aggression displayed by the US/Israeli axis has cemented a previously non-existent consensus that only nuclear weapons would guarantee the state’s survival.
Another Iranian advantage lies in US disengagement from the region, and its subsequent reliance on Saudi Arabia as its primary regional power. Saudi Arabia, Iran and China are all mainly concerned with stabilising the region to ensure economic growth and oil flows. If the US hopes to enlist Saudi Arabia in its fight against Iran, it will have to square the circle of Saudi and Iranian dependence on China, their largest trade partner, who absorbs 16% and 30% of their respective exports. Saudi Arabia would rather let sleeping dogs lie.
Indeed, resuming sanctions would risk re-igniting maritime tensions in the Persian Gulf, placated by the Chinese-mediated March 2023 deal between Saudi Arabia and Iran. This Saudi hesitancy, underpinned by Iranian threats of maritime actions, will give Iran room to breathe and manoeuvre. Again, commercial shipping is treated as a geopolitical lever, a trend perhaps unavoidable as globalisation recedes and political blocks emerge.
RISK ASSESSMENT REPORTS:
Enhance your decision-making with Risk Intelligence's comprehensive risk assessment reports
Tailored to your needs, our reports offer in-depth analyses of threats for specific operations, regions, or routes. Whether it's the Voyage Risk Assessment for operational readiness or the Security Risk Assessment for strategic planning, our insights equip you with the knowledge to mitigate risks effectively.