Geopolitics Review Extra - 19th June 2025
Iran and Israel: The Big Picture
Contents
Introduction
The Big Picture
The US-Iran Nuclear Deal
Is The United States Involved?
Concluding Remarks
Bitesize Edition
With this latest escalation between Israel and Iran, we’ve entered into an escalatory spiral that we didn’t see in the previous clashes in April 2024 and October 2024. They were both de-escalatory in nature. However, when we look at the big picture here, both contributed to creating the environment we find ourselves in today, which has seen Israel and Iran enter into all-out war.
As a consequence of this conflict, we’ve seen oil prices spike in the last few days. We’ve also seen both sides attack the oil facilities of the other. Will this have a long-term impact on the oil markets?
Also, some are discussing the potential for an Iranian blockade of the Strait of Hormuz. While unlikely, it’s worth considering the potential impacts of such a move, and whether certain changes in this conflict would lead to a blockade of the Strait of Hormuz becoming more likely.
We also saw the planned sixth nuclear talks between the United States and Iran cancelled as a result of this conflict. With these talks collapsing, tensions between Iran and the United States also remain elevated. In the last few days, Trump has been pondering how active a role he wants the United States to play in this conflict in the Middle East. What characteristics of this conflict could influence his decision here, and how involved will the United States become? Find out in today’s post.
Introduction
On Monday, I discussed the three prime reasons why we saw Israel launch this attack against Iran.
Firstly, the IAEA ruling that Iran wasn’t sticking to its nuclear obligations gave Israel the reason it believed it needed to attack. Netanyahu was also incentivised personally to pursue war with Iran to uphold his coalition. The final reason is that Israel wants regime change in Iran, as seen by Netanyahu’s rhetoric since this conflict started last week.
However, there is still much more to discuss here. We have to consider the big picture view of this conflict, framed through the previous tit-for-tat interactions between Israel and Iran that we saw in April 2024 and October 2024. We also have to assess the impact on the oil industry, the collapse of the US-Iran nuclear deal, and the potential for US involvement. Lots to discuss, so let’s dive in.
The Big Picture
To put this latest conflict into perspective, we have to return to the previous tit-for-tat we’ve seen unfold between Israel and Iran.
On April 1st, 2024, Israel bombed an Iranian consulate in Damascus, killing a number of Iranian officials and IRGC generals. In response, on April 13th, Iran launched strikes towards Israel in collaboration with Islamic Resistance in Iraq, Hezbollah in Lebanon, and the Houthis in Yemen. This Iranian response was named Operation True Promise, of which today we’re seeing the third iteration unfold. The Iranian response back in April 2024 involved 170 drones, 30 cruise missiles, and 120 ballistic missiles, many of which were shot down by Israel with the help of the Americans, British, French, and Jordanian air forces. It’s worth noting that Jordan's involvement was to defend against objects flying through its airspace, a stance that they have maintained with this latest escalation between Iran and Israel. After the Iranian response, they stated that the attacks can be deemed “concluded” in their eyes.
The rhetoric here, despite a series of unprecedented attacks between Israel and Iran, was de-escalatory. On April 19th, Israel launched airstrikes at an air defence facility near Isfahan, Iran. Satellite images suggested that this attack destroyed an Iranian S-300PMU2, a surface-to-air missile defence system. Importantly, these strikes were limited, and the Iranians continued to pursue de-escalation in the aftermath. They stated that any explosions heard were in defence against Israeli drones, and that no attacks had hit. Regardless of the truth behind the damage of this Israeli attack, both sides sought de-escalation here.
After Iran’s response occurred on April 13th, they immediately sought to calm tensions by stating they were satisfied with the tit-for-tat. When Israel responded, they responded with a reduced level of attack than what had been seen previously. The Iranians “laughed” this attack off as weak and decided not to respond to it. When viewed in its totality, we were clearly in an environment of de-escalation.
In October 2024, Iran launched Operation True Promise 2, involving launching 200 ballistic missiles in two waves, targeting military assets in Israel. From the Iranian point of view, this was in response to Israel’s spree of assassinations, which saw them take out Hamas leader Ismail Haniyeh while he was in Tehran, Hezbollah leader Hassan Nasrallah, and IRGC general Abbas Nilforoushan. In September, we’d seen Hezbollah dramatically weakened via the pager explosions, as Israel somehow had access to Hezbollah communication devices and rigged them with explosives. Analysts saw this October attack as Iran hoping to save face after it had been severely weakened by Israel’s moves over the months prior, especially via the moves the Israelis had made against Iran’s proxy, Hezbollah.
This Iranian attack in October saw the Israeli air defences more overwhelmed than the April response, but there wasn’t extensive damage caused. Once again, the United States and Jordan were reported to be intercepting Iranian missiles. The largest hit area was the Nevatim Airbase in Israel.
Israel waited until October 26th to respond. This was another de-escalatory measure, using time to reduce the likelihood of an escalatory spiral forming. Israel launched three waves of strikes against Iran, Iraq, and Syria, but they told Iran beforehand what they would be targeting. In the buildup to this attack, we also saw leaked U.S. intelligence documents that detailed Israel’s preparations. The Israeli targets largely included Iranian military assets, specifically air defence systems and factories. The biggest takeaway here is that this attack reportedly destroyed all of Iran’s long-range surface-to-air missile batteries and long-range detection radars.
With this strategy, it’s worth considering if April 2024 and October 2024 were directly related to the recent events we’ve seen in June 2025. Yes, both were de-escalatory, but they both contributed to Iran’s weakened air defensive capabilities, which have allowed Israel a level of success in its strikes against Iran in the last week.
In October 2024, the United States and Israeli officials both stated that most of Iran’s air defence network was destroyed in the aftermath of these attacks, and that this would pave the way for potential future Israeli strikes. This has likely always been the plan. When the IAEA ruling and Netanyahu’s potential coalition collapse emerged, the stars had seemingly aligned for the Israelis, and they could take advantage of Iran’s lack of air defence and the environment that they created through their previous operations.
But, if it was only to better position the Israelis for these attacks in the last few days, was this de-escalation at all? Was it preparation? Very likely, and that is the bigger picture here. This Israeli aggression was always going to come, but the timing was unknown. We now know that this time has arrived.
So, with this conflict unfolding in the Middle East, it’s worth considering the consequences of such a war. When discussing any conflict in the Middle East, it is always worth discussing crude oil. What impact will be seen here? And what of the discussion surrounding a potential blockade of the Strait of Hormuz?
Oil, Gas, and Hormuz
Since the start of this conflict last week, we have seen multiple acts of aggression against the oil and gas sectors of both Israel and Iran. We saw Israel hit Iran’s South Pars gas field on Saturday, and they also struck the Shahran oil depot in Tehran. In response, Iran attacked the Haifa oil refinery.
Also, vessels in the Strait of Hormuz have been reporting electronic interference. This is affecting vessel positioning reporting and could be a smokescreen for Iran or other Middle Eastern states to relocate their assets secretly.
The Strait of Hormuz is a strait between the Persian Gulf and the Gulf of Oman. It is one of the world’s most important strategic chokepoints, largely because any disruption there would cause severe damage to the global energy trade. 20% of global crude oil flows travel through the strait, as well as close to 20% of global demand for liquefied natural gas, mainly coming from Qatar and the United Arab Emirates.
Blocking such energy flows from entering the global market would have dire effects, especially via upward pressure on the prices of crude oil and natural gas. Despite this, in the last few days, some Iranian officials have discussed limiting transport throughout the Strait of Hormuz. Is this a valid strategy that the Iranians could pursue?
The simple answer to this question is that if Iran shut the Strait of Hormuz, it would also harm itself. This brings us to the most important point here, which are the biggest facilities that, if hit, would cause the most damage to Iran?
Kharg Island - This is Iran’s primary oil export terminal, handling over 90% of its crude oil exports.
Jask Oil - This terminal is connected to a 1000km pipeline from Goureh, which allows Iran to export directly into the Arabian Sea.
Goureh Terminal - The start point for crude transfers from inland areas to Jask for export.
Note that none of these facilities have, as of yet, been hit by Israeli attacks. Also, look at where Kharg Island is located on the map above. By blocking the Strait of Hormuz, Iran would restrict 90% of its own crude exports.
The blocking of the Strait of Hormuz is a scenario to consider and be aware of, but due to the potential negative impact on Iran, it is one I don’t see unfolding in the current environment of the war today, because it would hurt Iran more than it would hurt Israel. In high likelihood, such a strategy wouldn’t hurt Israel at all because most of Israel’s energy imports, such as those from the United States and Azerbaijan, don’t navigate the Strait of Hormuz.
The only scenario I can consider where the Strait of Hormuz could be blocked is where the pain it would cause adversaries would outweigh the negative cost to Iran. If Iran’s exports fell to incredible lows, the economic cost of blocking the Strait of Hormuz would be low. Earlier this week, there was evidence of this, with no tankers docked at Kharg Island, and exports have reportedly dropped to 102,000 barrels per day this week, from an average of 1,700,000 barrels per day this year. So the economic cost of Iran blocking the Strait of Hormuz could be low right now because they aren’t exporting anyway.
So, who would Iran cause pain to if it blocked the Strait? India imports close to 90% of its crude oil, and 40% of this comes from the Persian Gulf, which has to travel through the Strait of Hormuz. China is also reportedly a large buyer of Iranian exports, and so they will already be suffering from Iran’s reduced imports. Also, other Gulf states would be hurt by reduced exports through the Persian Gulf, and this would anger nations who, currently, are remaining rather silent on this war between Israel and Iran.
So, to summarise, Iran would heavily hurt itself economically via blocking the Strait of Hormuz, or they would hurt relations with nations that possess somewhat positive relations with them. Hence, Iran will not pursue such a strategy, except as a last resort.
At this time, Israel also won’t attack Iran’s most important energy facilities because the damage is already being done via reduced exports. Israel attacking assets in the area could risk angering other Middle Eastern states, and if the damage is already being done against Iran without Israeli actions, this isn’t worth the risk.
As for Israel's energy facilities, they have already shuttered both the Leviathan and Karish natural gas fields, essentially shuttering two-thirds of their gas production overnight. However, the Tamar field does continue to operate. Also, the Haifa oil refinery was shut down in the aftermath of the Iranian attack a few days ago. Domestically, this could see Israel pivot to other sources of fuel, such as coal. But, when backed by the United States, the world’s largest oil producer, they likely will continue to move onwards without these energy facilities in operation.
Looking forward, expect crude prices to remain volatile. They have already spiked up into the $70-$80 range in the aftermath of Israel and Iran’s conflict, and the attacks on energy infrastructure. But, on the flip side, OPEC+ have also boosted production in recent months, which if repeated, could place downward pressure on oil prices. So, expect volatility, but the direction of which is yet to be seen.
Before this escalation, there did seem to be a potential solution to Israel’s worries surrounding Iran’s nuclear ambitions. This is, of course, referring to the US-Iran nuclear talks. How did they fall apart, and what is the likelihood that a deal will be returned to?
The US-Iran Nuclear Deal
In the aftermath of the recent attacks by Israel, Iran stated that talks were now “meaningless” with the United States. But with such differences on nuclear enrichment from both sides, they were already meaningless without changes in demands occurring from either side.
Trump and the United States wanted no Iranian enrichment. However, with their energy crisis, Iran needs some enrichment, especially with Russia planning to aid in the construction of 8 new nuclear power plants in Iran. Yes, the United States was happy to have Iran import enriched uranium, but from a self-interest point of view, Iran couldn’t accept this. If the United States suddenly pulled out of the deal, Iran needed its own supply to fulfil its needs, regardless of whether these needs are for peaceful purposes or not.
Tomorrow, there is reportedly set to be a meeting between Europe and Iran in Geneva to discuss the escalating tensions, as well as to give assurances whether Iran’s nuclear program will be used for peaceful purposes or not. I’d expect the talks not to lead to meaningful progress to end this conflict, but it is likely a pursuit by the Europeans to understand more about what is unfolding in this conflict. We could see more news on the status of Iran’s nuclear weapons pursuits, of which we continue to receive conflicting information.
A big question that emerges in the aftermath of the cancelled sixth talk between the United States and Iran is how much of a role the United States played in Israel’s initial attack on Iran last week. Before the cancellation, could it be assumed that the United States fully intended to attend these sixth talks?
Alternatively, perhaps the United States knew the talks were already doomed to fail, and so they approved an Israeli attack?
Or, did the Israelis not seek approval at all, and did they launch the attack because the timing suited them?
Netanyahu has since revealed that the United States did know about Israel’s attack plans in advance. This would lead me to conclude that either the United States knew the talks were doomed and they approved this Israeli attack, or they didn’t approve the attack, and the Israelis did it anyway.
Despite this, the reality now is clear. Tensions are unlikely to improve between the U.S. and Iran, and Donald Trump is considering more U.S. involvement in this conflict. Once again, moves such as this solidify the environment of escalation that we remain in. How could this unfold from here?
Is The United States Involved
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