For western states, Iran is of crucial strategic importance because of its proximity to oil-producing facilities close to the Persian Gulf. Heavy commercial traffic passes through the Strait of Hormuz, close to the Iranian coast.
Oil is also transported through the Strait of Hormuz, approximately 30% of the world’s supply takes this route and 20% of American oil consumption. Western powers are keen to avoid a sharp rise in oil prices. This is important for western domestic economic and political stability. For the Gulf monarchies, oil accounts for the majority of their economies, so the threat of Iran closing the Strait of Hormuz is one that concerns them.
The destruction of Iraq as a modern state in 2003 left a power vacuum in the Middle East that allowed Iran to increase its power and influence. In response, western arms sales to Saudi Arabia have increased significantly. For example, since the Saudi-led war on Yemen began in 2015, the United Kingdom has licensed £4.7bn worth of arms to Saudi Arabia including aircraft, drones and bombs. The United States and France are also major arms suppliers to the House of Saud and the Gulf monarchies.
Iran has four submarines (three built by Russia), three Destroyers (one built by the UK, two by the US, all from the pre-1979 period), and five light patrol frigates (three UK-made pre-1979) as well as 25 midget submarines (four of which are North Korean), 24 small missile ships and some small patrol craft.
The US’s Fifth Fleet is in Bahrain and consists of Carrier Strike Group (CSG) 3, with two guided missile cruisers. In the event of war, the US Sixth Fleet could be immediately mobilised to bolster the Fifth fleet.
As shown by their obtaining of midget submarines among other small craft, Iran’s focus is not on tackling the US or its allies head on in a military battle, but on using stealth and mobility as well as using its surface to surface missiles.
The western arms supply means that Saudi Arabia, like Israel, has a technological advantage over Iran. But Iran has more operational experience, and in a conventional war, it is likely that US troops would be needed to defeat Iran’s Revolutionary Guard and keep the Strait of Hormuz open to the flow of oil. Iran might attack the Gulf monarchies’ oil production facilities and transport, rather than engage in a conventional war, which could have a huge impact on world oil supplies.
US hostility to Iran has increased since the election of President Trump and his abandonment of the Iran nuclear deal, imposition of economic sanctions and military threats, including “obliteration.” The European Union wants to salvage the nuclear deal but European powers remain broadly allied to US foreign policy in the region, as shown through their arms sales. Therefore, Iran prefers Chinese and Russian influence. The Shanghai Cooperation Organization works on military, economic and cultural cooperation across the region and is something of a balance to US dominance.
China has even more to lose, economically, than the US should a military war break out. 42% of Chinese oil goes through the Strait of Hormuz. China wants peace, and with it, oil security. Russia, in contrast, might receive a boost in the event of war. As the world’s second biggest oil producer, a crisis in the Gulf would boost its own oil exports.
Eastern and western powers have plenty at stake as hostilities increase between the US and its allies and the Islamic Republic of Iran. Aside from the rational economic drivers that might provoke or prevent war, there are also questions of prestige and ideology. As Iran seeks to project power across the region, it will not seek direct military confrontation with a far superior power, but it cannot afford to back down in the face of the Trump administration’s threats. On the American side, the ideology of key administration officials like Secretary of State Mike Pompeo and National Security Adviser John Bolton hold long-term ideological commitments to US-Israeli hegemony in the region, and are likely to continue to push their president towards conflict.