The art of the deal, or of any successful negotiation, is that while no one gets everything they want, everyone gets something that is important to them. So it was with the ceasefire that ended the Iran-Israel war. Israel, Iran and the United States have all gained in the short-term. But who will triumph in the long-run?
For Israel, Iran’s possession of a deliverable nuclear weapon posed an intolerable, existential threat. There can be no doubt that Iran was close to achieving this aim, enriching uranium far beyond the level needed for nuclear power generation, and doing so in secretive, hardened locations. It had a delivery system, with ballistic missiles capable of reaching Tel Aviv. Only the question of a bomb mechanism remained and this could have been resolved with a bomb too large to fit on a missile, but deliverable by other means.
Following the war, all three parts of Iran’s nuclear weapons programme have been severely degraded. Most of the senior scientists working on a bomb mechanism are dead. The enrichment facilities are at the very least severely damaged. Most of Iran’s long-range missiles and missile launchers have either been used or destroyed. Moreover, by weakening Iran, Israel has reduced the threat from Tehran’s proxies such as Hamas, Hezbollah and the Houthis. While Israel’s military leadership wished to wage the war without foreign assistance, the political leadership sought direct American intervention. This was achieved, thus demonstrating and strengthening Israel’s strategic alliance with Washington. All of this was accomplished with the loss of fewer than 30 Israeli lives.
What Israel failed to achieve was regime change in Iran. For 40 years the Ayatollahs have based their regime’s legitimacy on calls to destroy Israel and drive the United States from the Middle East. They remain in power and committed to a vision they believe to be divinely inspired.
What, then, did Iran gain from the ceasefire? The country is ruled by an ageing, ideologically rigid theocrat who is currently hiding in a bunker. He governs an ethnically and religiously diverse nation. Iran’s Kurds, Azeris, Baluchis, and Arabs together make up nearly half of the population, and they have long resented Persian dominance. Christians, Jews, Sunni Muslims, Baha’is, and Zoroastrians have been systematically persecuted by the Islamic revolutionary government. This multicultural patchwork could easily unravel without widespread fear of the Ayatollah’s secret police.
Ayatollah Khamenei may very well believe the encouraging propaganda broadcast on state television, but the Iranian economy is failing and his government increasingly unpopular. His regional allies, Hamas, Hizbollah and the Houthis, have been greatly weakened while his international allies, Russia and China, have provided little tangible support. At 86 he faces a looming succession struggle, but many of his most trusted potential heirs have been eliminated. For such a weak leader to survive such a massive military blow must be considered a success. His agreement to a ceasefire, however brief, allows the regime to survive and the revolution to rebuild.
Many other regional players have also been affected by the war. For one thing, the interests of the conservative Gulf Arab monarchies were conflicted. On the one hand, they welcomed any action that weakened Iran. Iran has long posed an ideological and security threat to them. The 1979 Iranian Revolution supercharged Islamic militancy in the region forcing Saudi Arabia to adopt far more socially conservative policies. Saudi Arabia’s King Salman takes his role as Custodian of Mecca very seriously, yet the Ayatollahs have explicitly challenged his right to this status and tried to disrupt the Hajj more than once. Both Saudi Arabia and the UAE recently went to war against Iranian proxies in Yemen. Iran has territorial disputes with several of the Gulf states and, of course, Iran’s nuclear ambitions are as much a threat to its Arab neighbours as to Israel.
“For the Gulf Arabs, then, a ceasefire is the ideal outcome: Iran has been weakened, but the Gulf states have not been seriously attacked.”
On the other hand, the Gulf Arabs did not wish to be drawn into the Iran-Israel conflict. Salman, in particular, is in the midst of a very ambitious programme to reshape Saudi Arabia socially and economically. He needs regional stability to attract foreign investment and oil revenues to finance economic development. But all the Gulf Arabs are highly vulnerable to Iranian missile attacks. Their oil fields, oil-loading terminals and above all life-sustaining seawater desalination plants are all easy targets. For them, then, a ceasefire is the ideal outcome: Iran has been weakened, but they have not been seriously attacked.
Syria, Lebanon, Jordan and even Iraq have long felt the boot of Persian imperialism delivered by the likes of Hezbollah and Iraq’s Hasht al Shabi or popular militias. These Shia forces have killed thousands of Sunni Arabs and, like Hamas and the Houthis, will no longer be receiving generous support from Tehran. For the first time in decades, Syria and Lebanon have the opportunity to set their own course without taking instructions from Tehran.
But there’s another group with interests at stake: oil producers and consumers. The war saw price increases for some shipping and insurance rates as well as for jet fuel from Gulf refineries, which have become very important for Europe since it imposed sanctions on Russia. However, it could have been much worse: there was no loss of supply and no crude oil price spike. Attacks on oil facilities were limited to Israel’s refinery at Haifa and Iran’s North Pars gas field. The Straits of Hormuz remained open. Had it been needed, the Saudis maintained enough spare capacity to compensate for the total loss of Iranian oil exports.
Nevertheless, both oil producers and consumers have drawn lessons from the conflict. The apparent vulnerability of Gulf oil has increased demand for alternative energy supplies in China, the United States and Europe. Europe, with very little oil of its own, will seek to accelerate its transition away from hydrocarbons, while the United States, already the world’s largest oil producer, will seek to increase domestic production even more.
China, for its part, is heavily dependent on flows of oil from the Persian Gulf. It remains one of the few nations still buying oil from Iran, is currently Iran’s largest customer and buys Iranian oil at a deep discount. However, the People’s Republic buys even more oil from Saudi Arabia and made its displeasure with Tehran clear when Iran attacked Saudi oil facilities at Abqaiq in 2019. And Beijing will have cautioned Tehran against similar attacks or closing the Straits of Hormuz during the recent conflict. While China was no doubt mollified to see American military assets diverted from the Pacific to the Indian Oceans, this will only have emphasised fears that in times of crisis, the US Navy could interdict all oil flows from the Middle East to China — a profound strategic liability.
The United States, meanwhile, has come off well from the ceasefire. Iran’s nuclear ambitions have been set back with no loss of American life. There has been no oil shock, no increase in inflation, and no stock market crash. Most Americans supported the President’s action and allies have seen that Donald Trump is not the next Neville Chamberlain. With the threat from Iran diminished, the United States may finally be able to make its much-anticipated pivot towards Asia.
Nevertheless, while the American strike on Iran was impressive — involving the world’s largest conventional bomb — it remains uncertain whether “one and done” will be enough to change Iran’s behaviour. Will the Ayatollahs agree to forego uranium enrichment and curtail their ballistic missile programme? Will they allow inspectors to visit the damaged sites and accept direct negotiations with the United States? Through prolonged negotiations, Europe and the United States have tried to bring Iran back into the community of nations. Now, the United States has carried out a very limited military operation. If Iran’s regime will not change its behaviour, some argue that the next step should be regime change. But that would create an whole new raft of risks for regional instability. While foreign powers can support domestic efforts, far better the regime change is carried out by the Iranian people themselves.
