Iran's Supreme Leader Ayatollah Ali Khamenei waves before voting in the country's presidential election in Tehran, Iran, July 5, 2024.
Iran's Supreme Leader's Office Reuters
Iran's powerful proxy network across the Middle East is being hit again and again by Israel, which has sharply escalated its battle with the Lebanese militia Hezbollah and killed its longtime leader Hassan in a series of airstrikes in Beirut on Friday. ·Nasrallah.
Hezbollah is Iran's most important strategic ally, both a militant and a political organization. Since its founding in 1982, Tehran has funded and nurtured Hezbollah, making it widely considered the most armed non-state organization in the world.
start with one a series of sabotage attacks In early September, this resulted in an explosion Thousands of Hezbollah pagers, Israel has gone from disabling large swaths of the group's communications systems to eliminating its most powerful leader and several other top commanders.
Iran's generals and its Supreme Leader Ayatollah Ali Khamenei have promised retaliation, but their actions and language suggest a more cautious response so far. An all-out war between Israel and Iran would be devastating for the entire region, but would be especially damaging for Iran, whose economy is already in trouble and whose oil facilities are particularly vulnerable to attack.
It is worth noting that international benchmark Brent crude oil prices, which are usually highly sensitive to supply threats, are still hovering around $70 per barrel, indicating that the market is also predicting a conservative response from Iran, one of OPEC's largest oil producers.
“Israel's decisive strikes against Hezbollah over the past two weeks have essentially destroyed the crown jewel of Iran's regional proxy network,” Behnam ben Taleblu, a senior fellow at the Foundation for Defense of Democracies, told CNBC. .
“Iran's response plan is not good. If the Islamic Republic intervenes more directly, it will be directly targeted in the back. For this reason, survival is better than revenge, especially in a war of attrition.”
After former Hamas leader Ismail Haniyeh was assassinated in Tehran on July 31, Khamenei vowed to respond “blood for blood”, but this has not happened so far. But the tone after Nasrallah's killing was markedly different – Iran's leader made clear it would be Hezbollah's choice of response.
“All resistance forces in the region stand with and support Hezbollah,” Khamenei said on the X social media platform on Saturday. “The resistance, led by the venerable Hezbollah, will determine the fate of the region.”
'Iran showed restraint'
Iran's economy has suffered for years from crippling Western sanctions and widespread mismanagement and corruption. Prolonged high inflation has eroded the purchasing power of Iranians, making basic necessities unaffordable amid the sharp depreciation of the Iranian rial. Regional analysts say the country of nearly 90 million people cannot afford a war.
Iran's recently elected president, Masoud Pezeshkian, appears determined to try to turn the tide, in part because he has expressed a desire to improve relations with the West and restart negotiations on the Joint Comprehensive Plan of Action (JCPOA), or Iran nuclear deal, which in theory would Sanctions on Tehran could be eased in exchange for curbs on its burgeoning nuclear programme.
Iranian President Masoud Pezeshkian attended his first press conference after taking office. Held on September 16, 2024 in Tehran, Iran.
Majeed Saidi | Getty Images News | Getty Images
Pezeshkian, who is often described as a reformist, reportedly urged restraint in response to ongoing Israeli attacks on Hezbollah and Yemen's Houthi militants, who are also backed by Tehran and have been targeting Israel and the United Arab Emirates in the Red Sea. Ships with ties to Israel.
“Despite its rhetorical commitment to retaliate, Iran has shown restraint in practice despite the dramatic escalation in Israel,” said Xina Tusi, senior nonresident fellow at the Center for International Policy. “Many reforms within the Pezeshkian administration Some believe Iran cannot afford a war that could result in its critical infrastructure being targeted.”
However, hard-liners in the Iranian government believe a strong response is necessary to deter Israel, fearing that Tehran or any of the country's nuclear facilities could be the next target.
On September 28, 2024, after Israeli warplanes attacked the Dahiyeh area of Beirut, Lebanon, surrounding buildings were damaged, smoke rose, and a boy was among the wreckage of the plane.
Hussam Shibarro | Anadolu | Getty Images
For now at least, Iran's priority “appears to be to maintain its regional influence and continue its war of attrition against Israel without sparking a wider confrontation that would destabilize its alliances in Lebanon, Iraq, Syria and Yemen, or lead to An attack on Iran “is itself,” Tusi said.
On Monday, Israeli Defense Minister Yoav Galant said a ground attack on Lebanon was possible in the coming days. Whether such developments will change Iran's calculations remains to be seen.
Regional deterrence 'now in chaos'
Hezbollah said it would name a new leader as soon as possible and continue firing rockets into Israeli territory as far as 150 kilometers (93 miles), adding that its militants were ready to deal with a potential Israeli ground invasion. Israel continued its air strikes over the weekend, saying it hit multiple targets in Lebanon on Sunday.
According to Reuters, Hezbollah deputy leader Naeem Qasim said on Monday: “We are doing the bare minimum… We know this battle may be long.” He added: “We will be like in 2006 victory over Israel's enemies during the liberation of Israel,” he was referring to the last bloody war between the two adversaries.
FILE PHOTO: Lebanese Hezbollah leader Sayyed Hassan Nasrallah makes a rare public appearance to greet supporters during an Ashura ceremony in southern Beirut on November 3, 2014. Give a speech.
Hassan Shaaban | Reuters
Despite Iran's disadvantage, it appears committed to maintaining support for its regional proxies.
“Iran is unlikely to stand up to Hezbollah, but it will support Hezbollah and work to restore Hezbollah,” Ali Vaez, Iran program director at the nonprofit Crisis Group, told CNBC.
“Iran's regional deterrence is now in disarray. But that doesn't mean Iran will give in and give up. It just doesn't have viable strategic alternatives to support the non-state actors that provide it with strategic depth.”
Meanwhile, Israel has shown no signs of backing down, continuing to press ahead with a series of tactical victories – although these have yet to translate into achieving Tehran's strategic goal of forcing Hezbollah further away from its northern border so that it can return to displaced resident.
Helima Croft, global head of commodities strategy, said: “We suspect that some oil market participants will ignore this escalation as there have been no major physical supply disruptions and Iran has not shown Any willingness to participate in this conflict that has lasted for almost a year.
“However, it is difficult to see where this regional conflict is headed and whether this is the beginning of the end or the end of the beginning.”