Tehran has not lost, but neither has it won. The new phase of reconstruction will be delicate, with divided leadership. Russia could be crumbling, and China needs to pick up the pieces, but what?
The peace announcement about the war between the US and Iran marks a new strategic phase for both countries. Iran is a mix of radicalism and pragmatism. The war with Iraq in the 1980s and the recent clash with the United States helped bolster the regime when it was badly shaken.
It achieved an important success by imposing a blockade on the Straits of Hormuz. But society and the economy are badly scarred, and the leadership is divided. This division could pose a problem in the future when addressing the economy. The regime might fare worse in peace than in war.
Iran is not free of sanctions and external defiance, and future strikes are now a real possibility. Its air defenses proved powerless, and its retaliatory capabilities can scare adversaries, but they have shown they cannot achieve real military success.
Gulf states may want to hedge their bets, but they are scared and scarred by Iran’s wanton responses. That is, Iran is more isolated now than before. Its network of proxies has been badly damaged, and revamping it could further strain its already crippled economy.
For the US, it’s a truce. Oil prices will fall, and so will inflation, giving the tense global economy a respite. But the next phase is the most delicate. Diplomacy needs to be taken out of the hands of businessmen. A similar challenge is in store for Israel. It has been drawn into a global game in which Iran is just one of the moving pieces.
Therefore, Israel might need to calculate its responses within the tapestry of global balances; otherwise, a local success might backfire badly in response from afar.
Now, Russia is in the limelight. It’s losing on the front lines, and its economy is crumbling. Elvira Nabiullina, the Russian central banker and miracle worker, has disappeared. She kept the war economy going for more than 40 months of fighting; without her, it’s unclear how the country would fare.
China needs to prop up Russia, but this could become more taxing for Beijing. Plus, the new Russian entente with North Korea has sparked an arms race in Asia. South Korea and Japan are growing increasingly worried about North Korea’s expanding nuclear arsenal.
This is creating more points of contact between the US and China. China has a new interest in helping sort out Iran, Russia, and North Korea, messes that damage China as well as the US. Will it do it, or will it let the situation rot, risking rotting with it?
Both bets carry risks. China may want to strike a middle path, opening more channels of communication with the US while holding its friends’ hands. That might be tricky.
For the US, it could be a wake-up call. International politics requires careful handling and offers no easy answers. Washington wanted a deal with Russia and left Ukraine behind, yet Ukraine resisted and delivered, while Russia didn’t. (See https://www.appiainstitute.org/ukraine/ukraines-quiet-turning-point/) With Iran, it bought into the idea of regime change as a quick fix and ended up propping up the very regime it intended to topple.
Going forward, the US may need to think very carefully about how to handle the problem of problems—China.
