Iran-US tensions have significantly increased with the death of Iranian general Qassem Soleimani in Iraq. His death is most likely a response to increased Shia-dominated protests and attacks outside of the US embassy in Iraq, which were themselves triggered by the US strikes on Kata’ib Hezbollah (part of the Iran-backed Popular Mobilization Forces) in Iraq and Syria. Iran has promised to avenge Soleimani’s killing and raised uranium enrichment to beyond nuclear deal limits. Instability has continued, with rockets falling on the US embassy in Baghdad, and the US deploying additional troops to Kuwait. Executives must evaluate the exposure of their business to heightened tensions through both dampened customer confidence as well as physical security risks and prepare contingency plans.
Iran and the US would like to avoid a direct war, and ultimately seek to agree on a nuclear deal that allows the US and the world to continue monitoring Iran’s nuclear activities and Iran to begin transacting internationally. This would become possible if the Iranian regime can showcase a victory domestically by having pushed out US troops from Iraq and securing the ability to begin international transactions, and see improvements to its economy which has been crippled by US sanctions. In the meantime, Iran would likely aim to implement symbolic (but not escalating) attacks on US targets across the region to save face, maintain pressure on the US and negotiating power about the nuclear deal.
The Trump regime can also showcase a victory domestically by having eradicated a key Iranian figure responsible for the country’s proxy activity in the region, bringing US troops back home and securing a better nuclear deal from Iran. However, this is unlikely to occur in the short term, and in the meantime, instability and tensions will remain high in the MENA region, as US and Iran continue tit-for-tat military, cyber, and political activity against each other.
Executives can expect instability to increase in the MENA region through:
Beyond the ongoing situation of high tensions and tit for tat moves across the MENA region, numerous events can occur that further escalate the tensions and raise insecurity in the region.
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