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Israel's Attacks Risk Expanding Conflict with Iran's Proxies in a Shadow War

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The Escalating Conflict Between Israel and Iran's Proxies

The deadly attacks by Hamas, a Palestinian militant group, on Israel have brought attention to Iran's potential involvement and the risk of drawing Tehran's other proxies across the Middle East into an escalating conflict. While Israeli President Isaac Herzog has stated that there is no evidence of Iran's direct involvement in the attacks, officials have pointed out that Iran is a key sponsor of Hamas, providing financial support, equipment, and training.

Potential Implications of Iran's Role

Israeli Strategic Affairs Minister Ron Dermer has suggested that Iran may have had knowledge of the attack, raising concerns about Iran's strategic involvement. Major General Amos Yadlin, former head of the Israel Defense Forces' Military Intelligence Directorate, acknowledges that while Iran supports Hamas, the organization operates independently. However, an intensified conflict, even without direct Iranian involvement, could disrupt oil shipping in the Persian Gulf and hinder US-led diplomatic efforts to ease tensions in the region.

Broader Reach of Iran-Backed Proxies

Hamas is just one of the Iran-backed groups across the region, including Iraq, Syria, Lebanon, and Yemen. These proxies have targeted US military facilities, Saudi Aramco oil sites, and commercial ships in the Persian Gulf. They maintain a degree of separation from Tehran, which has helped prevent an all-out war escalation.
Israel's Balancing Act
Israel faces the challenge of eliminating the threat in Gaza without provoking a conflict with Hezbollah in Lebanon, another Iran-backed force. A heavy-handed Israeli response could potentially boost recruitment for Iranian proxies across the Middle East. Israel will carefully calibrate its response to avoid triggering a significant escalation. In conclusion, the escalating conflict between Israel and Iran's proxies raises concerns about the wider implications for the region. The potential involvement of Iran and its network of proxies underscores the complexity of the situation and the need for careful navigation to prevent further escalation. The ongoing shadow war between Israel and Iran is likely to intensify, with potential triggers for escalation in Iraq, Lebanon, Syria, and beyond.

Business Impact of the Escalating Conflict Between Israel and Iran's Proxies

The intensifying conflict between Israel and Iran's proxies, including Hamas, could have significant implications for new businesses, especially those operating in or with the Middle East. The potential involvement of Iran, a key sponsor of Hamas, adds a layer of complexity to the situation.

Disruptions in Trade and Diplomatic Efforts

Even without direct Iranian involvement, an escalated conflict could disrupt oil shipping in the Persian Gulf, a critical route for global trade. This could affect businesses reliant on these routes for their supply chains. Additionally, the conflict could hinder US-led diplomatic efforts to ease regional tensions, creating an unpredictable business environment.

Threats from Iran-Backed Proxies

Iran-backed groups such as Hamas have targeted US military facilities, Saudi Aramco oil sites, and commercial ships in the Persian Gulf. An escalation could increase these threats, posing risks to businesses in various sectors.
Israel's Strategic Response and Business Implications
Israel's careful balancing act in responding to the threat without triggering a significant escalation is crucial. A heavy-handed response could boost recruitment for Iranian proxies, potentially expanding the conflict and its impact on businesses. In conclusion, the escalating conflict between Israel and Iran's proxies underscores the need for businesses to stay vigilant and adaptable. The potential for significant geopolitical and economic ramifications calls for strategic planning and risk management.
Story First Published at: https://financialpost.com/pmn/business-pmn/israel-attacks-risk-new-front-with-iran-proxies-in-shadow-war
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