March 16, 2026
Risk Analysis & Insights, Titan, Middle East & North Africa, North America

The Fallout from Operation Epic Fury

By Theo Dyer

Coordinated American-Israeli strikes on Iran have plunged the Middle East into an unprecedented crisis. On the line is the survival of the Islamic Republic. Following the decapitation strike on Ayatollah Khamenei and other leadership figures, the hard-line Iranian Revolutionary Guards Corps (IRGC) has taken control over decision-making, appointed his son Mojtaba as a successor, and sidelined moderate voices such as President Pezeshkian (Kamiar, 2026). As American and Israeli strikes continue and Iran considers mining the Strait of Hormuz, how will key global stakeholders navigate the crisis?

Slouching Towards War

Iran appeared to end 2023 in a favourable strategic environment. Its diplomatic rapprochement with Saudi Arabia was followed by Israel’s regional isolation after the October 7th attack and Gaza War (Hokayem, 2023). But the decision of Hamas and Hezbollah to attack Israel without Iranian approval proved a catastrophic mistake. Their capabilities were heavily degraded by Israel’s campaigns in Gaza and Lebanon, with Hezbollah’s weakening contributing to the demise of Syria’s Bashar Al Assad, Iran’s most important state ally (Hoffman, 2024). Successive Israeli bombing campaigns and the U.S.’ June 2025 Operation Midnight Hammer pummeled the Iranian air defences and nuclear facilities vital to deterring further escalation (Rodgers, 2025).

In response to the Iranian regime’s violent crackdown on anti-government protests in January 2026, U.S. President Donald Trump ordered an extensive military build-up in the Middle East (Eisenstadt, 2026). Subsequent US-Iran negotiations in Oman failed to reach an agreement as the US stalled for time whilst moving military assets to the region (Knipp, 2026). Iranian concessions on its nuclear enrichment were unlikely, as ending the ambiguity surrounding its nuclear programme would remove a bargaining chip to hedge against direct conflict with the US and Israel (Fitzpatrick, 2025).

Operation Epic Fury

American and Israeli interests aligned over a strike on Iran. President Trump’s confidence following the Venezuela operation in January and need to deflect from domestic issues complemented Prime Minister Benjamin Netanyahu’s desire to exploit the gains made in 2025 and boost his popularity before Israel’s elections (Conroy, 2026; Rosenberg, 2026). Israel’s Operation Lion’s Roar and the US’s Operation Epic Fury opened on February 28th with the successful decapitation strike on Khamenei’s leadership meeting. Ongoing American-Israeli operations are largely focused on the Iranian navy, law enforcement facilities, air defences, and missile delivery systems (Brunchmann and Sampson, 2026).

In response to Operation Epic Fury, Iran has adapted a horizontal escalation strategy to threaten strategic trade corridors by disrupting transit through the Strait of Hormuz and launching drones into Azerbaijan (Joshi, 2026). Iranian strikes on the Gulf Cooperation Council (GCC) states aim to ruin their reputation for economic stability and convince them to apply pressure on the US to end the war (Abdullah, 2026). The IRGC could stir ongoing conflicts around Israel by encouraging Hezbollah or militants in the West Bank to escalate their activities (IISS, 2025, p. 105).

The American and Israeli operation may inadvertently fuel regional insecurity. If the IRGC initiates a nuclear weapons programme to restore deterrence, other regional powers could pursue their own weapons programmes or enter alliances with nuclear powers as Saudi Arabia has done with Pakistan (CFR, 2026). U.S.-Israeli interest in fomenting a Kurdish insurgency in western Iran has so far been rebuked by the Iraqi Kurdish government, fearing Iranian retaliation and US abandonment (Arraf, 2026). State fragmentation in Iran would create an unprecedented refugee crisis and an enabling environment for terrorist groups like the Islamic State Khorasan Province to target Türkiye and Europe (Klein, 2026).

Geopolitical Outlook

President Trump has taken an extraordinary gamble. A U.S.-aligned Iran would guarantee American dominance over the Middle East, reduce its need to commit troops to the region, and integrate Iran into global energy markets in a manner similar to Venezuela (Leoni, 2026). On the other hand, the Trump Administration’s indecisiveness over its war aims and pressure going into the midterms over high oil prices indicate that it may lack interest in committing to long-term military operations (CBC, 2026). It may also run into friction with Prime Minister Netanyahu, whose desire to cripple Iran could entrap the U.S. in a prolonged conflict (Wright, 2026).

China’s ‘Comprehensive Strategic Partnership’ with Iran has not shielded it from the war’s consequences. Its diplomatic and economic balancing between the GCC and Iran was jeopardized by Iran’s retaliation, and back-to-back American operations against Chinese trade partners Iran and Venezuela have impacted its energy security (Nie, 2026). China has been forced to replace blockaded GCC oil with expensive purchases on global spot markets, or from Russia at the risk of undermining its energy sovereignty (Hansoo, 2026). But a weakened Iran dependent on Chinese support and a volatile U.S. bogged down in the Middle East could benefit China’s longer-term ambitions on Taiwan and push for global leadership (Aboudouh, 2026).

Rising hydrocarbon exports to China have increased Russia’s leverage over their bilateral relationship. This will wane as China expands its renewable energy capacity (Webster, 2026). A protracted U.S.-Iran war could strengthen Russia’s global position by diverting supplies of the U.S.’ Patriot air defence missiles from Ukraine to the GCC and increasing demand for Russian hydrocarbons (Faulconbridge, 2026; Mirovalev, 2026). Until the war ends, Russia’s strategic hedging will continue, it has condemned the U.S. to defend its multipolar credentials but avoided direct involvement that would harm warming Russia-U.S. ties and worsen its negotiating position over Ukraine (Roos, 2026).

Halted shipments of sulfur from key GCC producers will drive up the prices of refining copper, cobalt, lithium and nickel, impacting mineral producers in Africa’s Copperbelt, Indonesia and elsewhere (Argus Media, 2026). Disruptions to GCC fertilizer exports will impact global food security and halts to investments by GCC sovereign wealth funds could reduce economic growth in emerging markets (France 24, 2026; Mills et al., 2026). Financial pressures could moderate the GCC states’ involvement in conflicts in the Horn of Africa, but geopolitical competition on the continent will continue as Iran uses non-state actors to wage asymmetric warfare against Western targets (Gbadamosi, 2026).

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