Iran’s Threat Constellation

By Rafael Hoffman

In the wake of Hamas’ attack on Israel, the United States ordered a naval fleet to the region to deter other Iran-sponsored proxies from spreading violence there.

Its premonitions on that risk were on target, but its hopes to discourage other groups from targeting Israel, America, and their allies have been mixed. While no other full-scale conflict broke out, small ones simmer on multiple fronts.

Hezbollah has kept a steady threat on Israel’s north with missile attacks. Shiite militias in Iraq and Syria consistently targeted the U.S.’s regional military presence.

Increasingly disruptive have been strikes on naval and commercial shipping in the Red Sea by Houthi rebels who control much of Yemen.

The Houthis largely emerged as victors in a bloody civil war against Yemen’s government. Their fight was mostly bankrolled by Iran, and the struggle was primarily a proxy war between Tehran and its regional arch-rival, Saudi Arabia.

Now, the Houthis are waging a low-scale war against western Red Sea shipping, saying its acts are aimed at punishing allies of Israel over the ongoing war in Gaza.

The Pentagon reports that the Houthis have launched over 100 drones and missile attacks on ships, nearly all of which have been intercepted by the U.S. or allied forces. Many of the Houthis’ targets were commercial ships, some of which have been stopped and detained in Yemen.

Houthi positioning at the foot of the Red Sea and along the Gulf of Aden allows the group to wield an outsized threat. Ten percent of world trade, including large volumes of oil and other energy shipping, pass through the sea, the Suez Canal to its north, and the Strait of Bab-el-Mandeb at its south. Noting the heightened risk, several carriers, including British Petroleum, announced that for the time being, they will be taking the far longer route around the Horn of Africa.

In response to this menace, the United States formed a coalition of 10 nations to secure shipping in the area. The group, which will be known as Operation Prosperity Guardian, includes Canada, several western European nations, Bahrain, and the small African island group Seychelles.  

To better understand the goals and stakes of Iran’s proxy attacks on the U.S. and its allies, Hamodia spoke with Behnam Ben Taleblu, senior fellow at the Foundation for the Defense of Democracies, an expert on Iran security and political issues.

It does not seem that Iran wants an open, hot conflict with the U.S. As such, what is its goal in the steady stream of proxy strikes on U.S. and allied targets in the region?

It’s worth unpacking the different elements of Iran’s “Axis of Resistance” that have come to the fore since October 7.

I am of the view that the Islamic Republic was aware that Hamas’ attack was coming. There has been open-source reporting on meetings held between Iran, Hamas, and Hezbollah in Beirut leading up to the attack. More importantly, you can now see the results of coordination in the provocations both on Israel’s borders and further away.

Iran has a habit of following one round of violence with another, or at least the threat of another, as we saw in May 2021 when Iran coordinated Hamas’ fighting with Israel with Hezbollah. 

This is a regime that says what it means and puts material resources towards that. When it says, “Death to Israel,” or, “Death to America,” it means it. However, it’s important to understand their strategy.

Knowing the challenge they would face in a direct conventional military conflict with Israel, unlike the Arab states that fought Israel during the Cold War era, Iran’s model is a death by a thousand cuts. This is precisely why we’ve seen a boom-and-bust cycle of violence, where in each cycle, there’s a different capability tested, with a different actor, focused on a different target.

I am inclined to see much more connectivity here than some governments and analysts. In my view, most of what’s going on is motivated by Iran’s desire to save its key Palestinian proxy from being wiped out, which will happen if Israel completes its mission to end Hamas’ political and military role in Gaza.

The Islamic Republic created, or in some cases co-opted, these proxy groups to strike its adversaries in a deniable fashion that protects it from direct retaliation.

By creating their Axis of Resistance, Iran has rather successfully gotten everyone to focus on the proxy and not the patron. This certainly works with the U.S., and even Israel to some degree.

This is how Iran, with its limited financial resources, has advanced its goals. Its proxy network are essential players in its cost-effective foreign and security policy.

Now, just because Iran’s strategy is very wise and efficient doesn’t mean it’s any less homicidal.

There are two theaters of Iran-driven violence worth noting. One is based in Iraq and Syria, the other in Yemen.

U.S. targets in the region have been struck a minimum of 75 times by Iraq- and Syria-based militias since October 7. The goal is to create a cycle of violence that spooks the U.S. into trying to get Israel to tamp down the conflict in Gaza.

On the Yemeni front, the Houthis first tried to strike Israel directly with medium-range ballistic missiles, land attack cruise missiles and suicide drones. But in the face of the multiple rounds of successful Israeli and American interceptions, they shifted to going after commercial shipping in the Red Sea. The goal there also is to signal that they can broaden the war.

All of this is primarily aimed at raising the risk premiums around Israel’s operations in Gaza. Iran’s thinking is that rather than coming to directly bail out Hamas, or fully activate Hezbollah and risk losing that proxy as well, it’s trying to raise the stakes.

Iran is playing on the responsibility that global actors feel to contain this conflict to push Israel to end its war against Hamas by messaging that if they don’t, they could set the whole region on fire.

If Iran is not prepared for open war or to lose a proxy, why are they willing to risk killing a U.S. serviceman or some other consequence that would beg a stronger response?

A big part of their calculus is American risk aversion. You’ve had three very different presidents, Obama, Trump, Biden, all essentially say the same thing about the Middle East being a junk bond of sorts and voicing a desire to focus on east Asia. This sends the wrong signals, both to U.S. partners and adversaries in the region.

After the U.S. left Afghanistan in the way it did, IRCG leaders said that that is not the same America of two decades ago, not the America that took action during the Iran-Iraq War. The younger generation of IRGC leadership knows the America of Obama saying, “Assad must go,” and then Russia and Iran successfully keeping Assad in power. They know the America of failure in Iraq and Afghanistan.

Why are the Houthis the best-positioned of Iran’s proxies to carry out these attacks? Is it mostly about geography?

For Iran, sponsoring the Houthis was a very low-cost investment which yielded high returns. By having a proxy that now controls most of the southern tip of the Arabian Peninsula, not only can Iran threaten Saudia Arabia and the UAE but also amplify its threats to freedom of navigation.

What effects are strikes having on shipping in the region?

There are a few levels at play here. Firstly, Iran is focused on the political effect. This places economic pressure, which in turn makes countries wary about the costs the war in Gaza has on markets. Their hope is that this uncertainty contributes to the voices pushing for an end to Israel’s operation.

The actual economic impact is, of course, real as well. The Houthi attacks increase risk of traveling through the Red Sea, Bab el-Mandab and the Suez Canal. That increases insurance premiums for ships, which thereby increases transaction costs. It also means that more ships are forsaking that route and going around the Cape of Good Hope, which means longer transportation timelines and higher fuel costs. If these attacks continue much longer, all these costs will be transposed onto the consumer in 2024.

Here, again, Iran takes advantage of the responsibility of other actors. Precisely by raising risks and driving up costs, the Islamic Republic gets more bang for its buck.

The Department of Defense announced its collective action plan, Operation Prosperity Guardian. What will this coalition do, and do you think it will serve as an effective deterrent?

It’s going to build on existing U.S. and allied naval capabilities in the area to better detect and intercept threats to shipping. They will probably measure their own success as to how effectively they are able to do that.

However, that alone will not restore safety to these waterways.

What really needs to happen is to build an architecture of deterrence by taking actions that change the Houthi risk calculus and, by extension, the Iranian calculus. To do that, the U.S. needs to pursue deterrence by punishment. The U.S. needs to start responding the point of origin of some of these strikes and send a message: “If you shoot at our ships, we’ll shoot right back at you.”

The U.S. moved a lot of military hardware in the region to do a great mission, which has effectively intercepted most of these aerial threats, and created channels for international trade to continue. But we haven’t impacted our adversaries’ risk tolerance. That’s why the most important question about the mission of this coalition is, what are their thresholds for the use of force?

Why have regional players with much at stake in Red Sea shipping, like Saudi Arabia, UAE, and Egypt, not joined this coalition?

Hats off to Bahrain for joining, but others have not. Previous efforts like these had more regional counties involved.

So, what may seem like needless risk looks like calculated risk to Iran and its proxies. It sees that America has a high threshold for the use of force, and even its uses of force are selective and limited. Sometimes the U.S. even drowns out its own military signals with press releases saying that strikes will be confined and limited. To Iran, that translates as aversion to fight.

It could be risk aversion. It could be because the conflict is related to a complex spiral that involves Israel. It could be because of the bilateral relationship that some of these countries have with Iran. It could be for a whole host of other factors. But given these nation’s reliance on trade that passes through the Red Sea, they certainly have a strong interest in maintaining safety there, which makes the question of why they didn’t join a stronger one. 

Why do you think the Biden administration has taken a light-handed approach in response to Iran proxy attacks?

There is a philosophical consistency in the Biden administration’s attitude towards Iran. The administration, from its inception, was oriented towards securing some renewed version of the 2015 nuclear deal. That’s based as much on dogma as it is on politics, and this approach informed its leaning towards restraint.

That is also what guided delisting the Houthis as a Foreign Terrorist Organization (FTO). The Houthis use child soldiers, siphon humanitarian aid, target religious minorities, fire on population centers, and are sponsored by the world’s foremost state sponsor of terrorism. They certainly fit any definition of an FTO. But the Biden administration’s calculus of restraint guided the de-listing. 

Then, of course, there’s a general risk aversion. The administration doesn’t want to risk any kind of armed conflict.

Iran touted its hypersonic missile development. Is there reason to fear this technology could end up in the hands of Hezbollah, the Houthis, or other proxies?

There are capabilities the Islamic Republic has but has not transferred to proxies, and others that it has. None of Iran’s proxies have the chemical weapons it developed.

It doesn’t treat all its proxies the same. It’s given different-range strike capabilities to different theaters. Palestinian proxies are the only ones without precision strike capabilities. Hezbollah was the first that received anti-ship capabilities. The Houthis were the first to receive medium-range ballistic missiles.

More broadly, the Iranian hypersonic capability is not fully tested. There is some footage of what looks like a hypersonic glide vehicle, and Iran has worked on re-entry vehicles.

Some of their claimed advancements might be Iranian [boasting], but we know many of its ballistic missiles can already re-enter the atmosphere at hyperbolic speeds. Deepening ties with North Korea and Russia, who have this technology already, make it likely that they have shared some of their advances with Iran.

That Iran has some level of hypersonic capability seems credible, but whether it will be transferred to a proxy remains to be seen.

The U.S. and Israel have been distracted since the war in Gaza began. To what extent has Iran capitalized on this to advance its nuclear development?

Unfortunately, that has been one of the casualties to the post-October 7 Middle East. Iran circumvented even more monitoring of its nuclear development, while the continuous growth of its enrichment and purity grows. The volume may have dropped a bit, but the speed increased, and its stockpile continues to increase. Rafael Grossi rang the alarm bell on this last month, but it doesn’t look like anyone was listening or cared.

Considering the myriad threats posed by Iran to the U.S. and American regional interests, what policy shifts do you think would renew effective deterrence?

America’s deterrence against Iran didn’t erode overnight, and it’s not going to be rebuilt overnight.

Even when the U.S. was willing to hit Iran hard, Tehran was still willing to take risky moves in response. After the January 2020 strike that killed al-Quds chief, Qassem Soleimani, Iran fired 16 ballistic missiles at U.S. bases in Iraq. Fortunately, no American was killed, but that’s no joke. That type of action is based on a mentality that the U.S. is a waning power whose leaders fear escalation. 

Iran’s security planners look for the easiest angle of entry and the easiest way to control a conflict, so you’re not going to restore deterrence with one strike or by creating one task force. There needs to be a thorough revamping of Iran policy. There’s been a lot of complaining by some in Congress about re-freezing this $10 billion or that $6 billion. Those moves are necessary, but that’s the low-hanging fruit. To deter Iran, this permissive environment has to shift. That means doing more to enforce sanctions and blocking its oil sales to China. Since 2021, Iran has made $95 billion in oil sales in violation of U.S. sanctions.

It’s also important for the U.S. to work with its transatlantic partners to effectuate a snapback of previous United Nations penalties on the Islamic Republic. That’s not because I am a fan of the U.N., but it’s the only unilateral tool available to the U.S., and if it expires, with Russia and China on the Security Council it will be impossible to put back into effect. 

Beyond that, we need to mesh our nuclear and regional security policy towards larger Iran policy. Another thing Iran ramped up since the world got distracted with Gaza was executions, jailings, and repression of dissent in the country. What Iran fears far more than the U.S. or Israeli military is its own people. Politically and morally, the U.S. needs to do more to support the Iranian dissent movement and help it move towards making regime change a realistic possibility.