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Key Takeaways :
1- Military Supply and Regime Outcomes Will Shape the Conflict Trajectory
• Ammunition supply levels will directly impact the duration and intensity of the conflict.
• The nature of the regime in power will be the primary driver of long-term stability.
• Continued extremist leadership increases the likelihood of renewed conflict in the near to
medium term.
• De-escalation is possible if a new regime engages with the U.S. on key conditions: nuclear
disarmament, cessation of proxy funding, reduced internal repression, and
secularization.
2- Conflict Has Become Regionally Contained—But Escalation Risks Remain
• Most neighboring and Gulf states are currently involved in a defensive capacity.
• The entry of larger regional powers would mark a transition to full-scale regional war.
• Broader escalation remains a key downside risk scenario.
3- Control of the Strait of Hormuz Is a Core Lever of Economic Coercion
• ~20% of global oil supply and ~5% of global trade transit the Strait.
• Iranian threats have already created de facto disruption by increasing shipping risk and
costs.
• Mining or blocking the Strait could disrupt global trade for 6–12 months, though at
significant cost to Iran and its partners.
4- Critical Infrastructure Targets Increase Strategic Vulnerability
• Iran has demonstrated willingness to target regional energy infrastructure.
• Water desalination facilities represent an additional point of vulnerability in Gulf states.
• Even low-level attacks risk undermining recent investment and economic stability in the
region.
5- Kharg Island Is a Strategic Chokepoint for Iran’s Oil Exports
• The island serves as Iran’s primary oil export hub.
• Disruption would have immediate implications for global oil markets.
Global Economic and Alliance Implications Are Material
• The conflict is already contributing to inflationary pressure globally.
• Strategic petroleum reserve releases are unlikely to materially offset supply shocks.
• Central banks are likely to respond with tighter monetary policy in the near term.
• Divergent responses among NATO members could strain alliance cohesion.
6- Geopolitical Competition with China May Intensify
• Control over Iranian (and Venezuelan) oil flows has implications for U.S.–China dynamics.
• Restricting China’s access to Iranian oil could create leverage in broader negotiations.
• Escalation could contribute to a renewed and more pronounced U.S.–China trade conflict
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