Iran's military will keep asymmetric advantage in Gulf

Significance

With geopolitical tensions in the Gulf rising as a result of Saudi and Iranian involvement in Syria and Yemen, the risk of military escalation in the Gulf and the Strait of Hormuz persists. For this reason, Iran has been investing heavily in developing weapons capability specifically for anti-access and area denial.

Impacts

• Any low-intensity skirmish could cause a substantial, if temporary, spike in oil prices and maritime insurance rates.
• Iran can use its partial control of navigation in the Strait to stop shipping and deny certain countries right of passage.
• The lifting of sanctions and Iran's reintegration into the world economy will further increase the cost of military action in the Gulf.
• Iran's asymmetric advantages will prompt GCC countries to obtain more specialised weapons and develop tactics to counter them.