The latest escalation of conflict in the Middle East reflects significant shifts in regional geopolitics. Nadeem Ahmed Moonakal explains how unfolding events carry serious global economic implications, as each actor pursues divergent goals
The United States is reasserting military primacy, and Israel wants to ensure its permanent dominance. Gulf states, meanwhile, want to de-escalate conflict, and Iran is preparing for a prolonged war of attrition for survival, exploiting regional pressure points. These overlapping strategies are reshaping the region’s security landscape, and challenging established international norms.
The government of Israel's Prime Minister Benjamin Netanyahu believes that current regional conditions provide an unprecedented opportunity to act more aggressively against perceived threats. In recent years, Israel has expanded military operations beyond its borders, increasingly targeting sites in Syria, Lebanon, and Gaza. Their operations have become more frequent and visible, often allowing Israel to violate international law without consequence.
Israel appears to be exploiting what it views as a temporary strategic window to permanently reshape the regional security balance in its favour by toppling the Iranian regime
Netanyahu is acting aggressively with US support. His actions may prevent Iran from rebuilding its regional capabilities. US-Israeli air strikes on Iran’s nuclear, missile, and oil facilities are intended to weaken the Iranian regime. They hope to reignite protests across Iran with greater intensity, creating internal pressure, while Iran struggles to maintain deterrence and respond to external attacks. Israel appears to be exploiting what it views as a temporary strategic window to permanently reshape the regional security balance in its favour by toppling the Iranian regime – an agenda it has long sought.
For the Trump administration, attacks on Iran are not just the result of Iran’s refusal to comply with certain important negotiation terms. Rather, they align with broader strategic objectives, including curbing Iran's nuclear and missile programmes, limiting regional influence, and reinforcing US dominance. Trump has often reiterated his agenda for regime change in Iran. The decision to strike, therefore, came even as regional partners, including Gulf states such as Oman, were attempting to mediate between the two sides. The episode will shape how the world perceives the US approach to diplomacy.
Attacking Iran aligns with Trump's broader strategic objectives, including curbing Iran's nuclear programmes and reinforcing US dominance
The US has repositioned its military assets and demonstrated its willingness to use force. By so doing, Washington has signalled that it remains the most consequential and dominant military power in the region. However, the implications of military escalation remain uncertain. The conflict may reshape regional deterrence dynamics and influence how allies and adversaries interpret the nature of US interventions.
The US hopes sustained pressure will contain Iran’s regional activities and weaken its deterrence. Yet military pressure also risks reinforcing the very security dilemma Washington seeks to resolve, 'ending the endless wars'.
Saudi Arabia, Qatar, Oman, and others in the region have spent the past decade trying to reduce regional tensions. For Gulf powers, the escalation is therefore deeply unsettling.
These governments' priorities are increasingly economic. Large development programmes, technological investment, socio-economic reforms, and diversification strategies depend on predictable security conditions. All these are now under threat.
Gulf states have spent the past decade trying to reduce regional tensions and are therefore prioritising de-escalation. Critical infrastructure and energy markets are all at risk of disruption
Critical infrastructure, shipping routes, and energy markets are all at risk of disruption. As a result, Gulf states are prioritising de-escalation and stability. Statements from their governments indicate a clear preference for avoiding involvement in the conflict. To protect national interests and domestic security, Saudi Arabia and others have pledged not to allow external powers to launch attacks on Iran from their soil. And while Gulf states have expressed concern over Iranian strikes, their restrained responses and patience suggest they want to prevent further escalation and avoid entanglement in a war they did not seek.
Iran faces the most complex strategic dilemma in the current escalation. Tehran understands that its conventional military capabilities cannot match the combined power of the US and Israel.
Instead, Iran relies on asymmetric capabilities, and appears prepared for a prolonged war of attrition. Rather than seeking a decisive battlefield victory, Tehran aims to impose costs over time. This is particularly important as Iran seeks to demonstrate its strength following the killing of its Supreme Leader. Its response also differs from the earlier twelve-day war, with attacks now appearing more diversified and broader in scale. Iran's strategy focuses on exploiting regional pressure points such as energy infrastructure, maritime routes, and American military facilities. By threatening these assets and pressurising other regional actors, Tehran hopes to raise the economic and political costs of prolonged war.
The latest escalation signals more than another cycle of regional confrontation. It reflects consequential shifts in regional geopolitics, and exposes the limitations and challenges to restraining and containing conflict amid Israel’s increasingly assertive military force.
Other great powers are watching the situation in the Middle East closely. Their leaders are reassessing the conditions and consequences of crossing red lines, which are reshaping international norms at a time when the rules-based order is already under strain.
The structural conditions that led to the latest escalation are likely to persist. These include shifting deterrence dynamics, the nature of extra-regional interventions, and fragile regional balances. As a result, political pressures and evolving power configurations may trigger recurring volatility in the Middle East, raising the risk of complex and prolonged confrontations.
