West Asia

The US-Israel war with Iran is now two weeks old, with no signs of a ceasefire. While US President Trump claims that the war is going well, Iran is far from defeated. Iran has managed to damage or destroy several US radars, bringing down Iranian drones has depleted inventories of interceptor missiles, it has successfully hit targets in the GCC countries, and has damaged ships in the Persian Gulf.

Iranian attacks on oil installations and shipping have pushed up the price of crude oil to $100/barrel - which will cause widespread economic pain - and will also force the US to seek an off ramp for the conflict. However, if the US withdraws without achieving any of its key goals - regime change in Tehran, and a commitment to drop its nuclear program - it will be seen as a strategic defeat. The GCC countries will have to rethink their security alliances with the US, and will have to seek terms with Tehran.