BATTLESPACE Updates

   +44 (0)77689 54766
   

NEWS IN BRIEF – MIDDLE EAST – CONFLICT

by

Sponsored by Bertin Exensor

 

www.exensor.com

 

—————————————————————————————————————————————————————————————————————————————————————————————————————————————–

Military And Security Developments

Jul 17.

KEY DEVELOPMENTS

IRAN

  • Increasing tensions over stalled nuclear talks between the US and Iran will elevate risks of UN sanctions re-application, compounding regional tensions.
  • Iran detained a vessel in the Gulf of Oman on charges of fuel smuggling, underscoring risks of vessel and crew detention for regionally engaged shipping firms.

ISRAEL

  • The Knesset’s recess on 27 July will moderate government stability risks caused by ultra-Orthodox parties’ exit from the coalition government and cabinet.
  • The EU’s decision not to sanction Israel underscores the bloc’s efforts to secure increased aid flows into Gaza; sanctions will remain possible in the coming months, elevating compliance risks for international businesses.

PALESTINIAN TERRITORIES

  • Settler attacks on reporters underscore increasing security risks for media staff and assets operating in the West Bank.
  • There is a realistic possibility of progress in ceasefire negotiations between Israel and Hamas in the coming days, though talks will remain extremely sensitive to deadlock.
  • A fatal crush at a Gaza Humanitarian Foundation (GHF) site highlights sustained threats to life for civilians in Gaza, amid broader humanitarian concerns.

IRAN

  • Increasing tensions over stalled nuclear talks between the US and Iran will elevate risks of UN sanctions re-application, compounding regional tensions. On 16 July, a spokesperson for Germany’s Foreign Ministry stated that the E3 (France, Germany and the UK) have assessed that activating the 2015 Joint Comprehensive Plan of Action (JCPOA) snapback clause is ‘an option’ if nuclear negotiations with Iran do not progress in the coming months. The snapback clause would facilitate the re-imposition of UN sanctions on Iran in a 45-60 day period, during which time Iran would have 30 days to demonstrate its compliance with the JCPOA. After Iran submitted its evidence, the UN Security Council would vote on a resolution to continue lifting sanctions on Iran. This vote would not be subject to vetoes from the Permanent 5 (China, France, Russia, the UK and the US) and would need nine votes from United Nations Security Council (UNSC) members to pass; if it does not pass, UN sanctions on Iran would be automatically re-imposed. The JCPOA snapback clause will expire on 18 October, meaning that the E3 would have to submit allegations of non-compliance by 3 September at the very latest. Consequently, if Iran and the US fail to make progress towards a nuclear agreement by mid-August, the risks of the E3 initiating efforts to trigger the snapback mechanism will substantially increase. On 15 July, Iranian state-affiliated media indicated that Iran would respond to efforts to re-impose UN sanctions by potentially withdrawing from the Non-Proliferation of Nuclear Weapons Treaty (NPT) and/or significantly advancing its nuclear programme. Such efforts would almost certainly increase regional tensions and possibly trigger further Israeli strike action targeting Iranian nuclear facilities, sustaining risks of regional travel disruption and instability through Q3.
  • Iran detained a vessel in the Gulf of Oman on charges of fuel smuggling, underscoring risks of vessel and crew detention for regionally engaged shipping firms. On 16 July, the Chief Justice of Hormozgan province announced that the authorities had seized a ‘foreign tanker’ in the Gulf of Oman for allegedly attempting to smuggle two m litres of fuel out of Iran. Although the authorities have not disclosed the name of the vessel, oil smuggling is widespread in Iran. Organised criminal elements are smuggling heavily subsidised fuel into neighbouring states via land and sea routes for resale at market rates. The Iranian authorities routinely detain fuel tankers based on allegations of fuel smuggling, most recently detaining two Tanzanian-flagged vessels (the Sea Ranger and the Salama) in April. In the coming months, Iran will likely sustain an elevated naval posture in the Strait of Hormuz to crack down on maritime oil smuggling amid sustained macro-economic pressure linked to US sanctions on key Iranian industries. This posture will drive increased exposure to regulatory scrutiny for regionally engaged firms, particularly shipping firms transporting oil through the Strait of Hormuz. This will drive risks of vessel and crew detention, particularly for firms with weak inventory controls whose vessels are more vulnerable to co-option. Although vessel seizures will possibly temporarily increase bilateral tensions between Iran and the vessels’ registry countries, such efforts are unlikely to critically increase regional tensions. Even so, given the high volume of international shipping traffic through the Strait of Hormuz, risks of vessel misidentification and detention will also remain elevated in the coming months, increasing temporary supply chain disruption risks for regionally engaged firms.

ISRAEL

  • The Knesset’s recess on 27 July will moderate government stability risks caused by ultra-Orthodox parties’ exit from the coalition government and cabinet. Earlier on 17 July, ministers from the ultra-Orthodox Shas party began submitting their resignations to Prime Minister Benjamin Netanyahu. The move followed the party’s decision late on 16 July to leave the Israeli cabinet over unmet demands to exempt yeshiva (seminary) students from mandatory military service. The party will, however, continue to support the coalition government. The development comes after another ultra-Orthodox party, United Torah Judaism (UTJ), exited the government on 14 July, leaving it with a slim majority of 61 seats in the 120-seat Knesset. Both parties are dissatisfied with Knesset Foreign Affairs and Defense Committee (KFADC) chair Yuli Edelstein’s proposed bill on ultra-Orthodox conscription. Shas’s decision to remain in government will moderate government stability risks in the coming weeks. However, Netanyahu will likely face pressure to remove Edelstein from his position in the coming days to appease Shas and avert a parliamentary no-confidence vote before summer recess on 27 July. In the likely event Netanyahu can sustain his government’s current majority until recess, it is highly unlikely the Knesset will be recalled for a no-confidence vote until after 27 October when parliament returns. This will reduce the prospect of early elections in 2025, possibly moderating a rise in anti-conscription, anti-government and pro-government protests in major cities.
  • The EU’s decision not to sanction Israel underscores the bloc’s efforts to secure increased aid flows into Gaza; sanctions will remain possible in the coming months, elevating compliance risks for international businesses. On 15 May, the EU’s foreign policy chief Kaja Kallas announced that the bloc has decided not to adopt punitive measures against Israel over its military conduct in Gaza. Kallas stated that the bloc’s foreign ministers will meet in two weeks to review Israel’s implementation of a series of steps agreed on 10 July to boost aid into Gaza. The EU has established a monitoring system to assess Israel’s compliance with the agreement, with reports expected every two weeks on Israel’s progress in reopening aid corridors and increasing the daily number of aid trucks entering the strip. The decision follows Kallas’s announcement on 20 May that the EU would review the EU-Israel Association Agreement, the basis for bilateral trade between the bloc and Israel. In the meantime, the EU will likely continue to call for Israel to engage in corrective measures or risk losing preferential market access in certain sectors (see Sibylline Middle East Crisis Update – 22 May 2025). In the event Israel fails to adhere to the conditionalities concerning aid distribution, the EU will possibly take steps to sanction Israel. This will likely lead to increased compliance and regulatory risks for international businesses operating in the country.

PALESTINIAN TERRITORIES

  • Settler attacks on reporters underscore increasing security risks for media staff and assets operating in the West Bank. On 13 July, according to CNN, Israeli settlers attacked one of its reporting teams on its way to Sinjil (Ramallah and al-Bireh governorate, West Bank) to report on the death of a Palestinian-US dual national who was beaten to death by settlers on 11 July (see Sibylline Middle East Crisis Update – 14 July 2025). This development came days after two journalists from the German state broadcaster DW were attacked by settlers while covering a planned protest against settler violence in the West Bank. Amid a broader spike in settler violence over recent weeks, media companies are at increased risk of targeted violence in the West Bank. While the Israeli government or Israel Defense Forces (IDF) are not involved in the attacks, the lack of repercussions for settlers highlights the tacit and ongoing repression of press freedoms in the West Bank and elevates human rights risks for foreign reporters. In the coming weeks, settler violence against Palestinians will likely sustain ethno-religious tensions and drive risks of further clashes in the West Bank. This will incentivise the IDF to adopt a heightened security posture and elevate staff exposure to crossfire and misidentification risks, particularly impacting on-the-ground reporters and their teams.
  • There is a realistic possibility of progress in ceasefire negotiations between Israel and Hamas in the coming days, though talks will remain extremely sensitive to deadlock. On 16 July, US President Donald Trump stated that there would be ‘good news on Gaza’ in the coming days, indicating possible progress in ceasefire negotiations. The statement comes amid regional media reports indicating that Israel has softened its negotiating position on the extent of the IDF’s withdrawal from Gaza during a potential ceasefire period. Concessions possibly relate to the size of its military buffer zone and whether the IDF would maintain control of the Morag Corridor (located between Khan Yunis and Rafah). In the coming days, mediators will almost certainly sustain efforts to resolve outstanding incompatibilities to establish a ceasefire, increasing prospects for further progress. Despite these efforts, however, negotiations will remain extremely sensitive to deadlock, particularly regarding the potential transition from an initial, 60-day truce to a longer-term ceasefire.
  • A fatal crush at a Gaza Humanitarian Foundation (GHF) site highlights sustained threats to life for civilians in Gaza, amid broader humanitarian concerns. On 16 July, the GHF stated that a crush at an aid distribution site in Khan Yunis killed at least 20 people. The GHF claims that the incident was instigated by armed Hamas operatives. Footage of the crush also shows GHF security contractors deploying tear gas, while GHP allege that Hamas militants had also fatally stabbed a medic during the crush. The incident underscores critical threats to life for civilians in Gaza, particularly those attempting to collect aid from GHF distribution sites, given broader crowd management and security concerns. Further crushes, shooting incidents and clashes in proximity to GHF facilities will also increase risks of disruption to aid distribution efforts, compounding food security concerns within Gaza. More broadly, firms associated with the GHF (particularly donors and service providers) and the IDF’s operations in Gaza will almost certainly continue facing elevated reputational concerns, as well as risks of targeted activism from pro-Palestine groups (see below).

RED SEA 

  • The Iran-backed Houthis will likely continue ballistic missile strikes against Israel in the coming weeks, sustaining bystander security risks in major cities and increasing the likelihood of Israeli retaliation. On 16 July, the Israel Defense Forces (IDF) successfully intercepted a Houthi ballistic missile allegedly targeting Ben Gurion Airport (TLV), with no reports of injuries or damage to infrastructure. The strike marks the 61st launch since the Houthis resumed their offensive against Israel on 18 March. Further missile attacks will be highly likely in the coming days and weeks, sustaining bystander security risks for personnel in major cities, including Eilat (Southern district), Jerusalem (Jerusalem district), and Tel Aviv (Tel Aviv district). These risks will likely be primarily caused by exposure to shrapnel from interceptions above its airspace and that of adjacent territories. The IDF will likely respond to the Houthis’ latest attack with airstrikes against Houthi targets in Yemen, possibly against the ports of as-Salif, Hudaydah and Ras Isa (all al-Hudaydah governorate), as well as locations in the capital Sanaa. This will continue to increase energy and food security risks throughout Houthi-controlled territory, while sustaining heightened security risks for on-the-ground international NGO and business personnel.
  • The Yemeni forces’ interception of Houthi munitions is unlikely to elevate diplomatic tensions but will moderately increase the risk of seizure for commercial vessels in the region. On 16 July, US Central Command (CENTCOM) stated that Yemeni National Resistance Forces (NRF) intercepted over 750 tonnes of Iranian-supplied munitions and weaponry that were en route to the Iran-backed Houthi militia. The shipment allegedly included advanced anti-aircraft, anti-ship and cruise missiles, along with components for drones and air defence systems. While the exact location of the seizure remains unknown, it likely took place in waters close to Yemeni territory, possibly in the Red Sea. The seizure marks the first major naval interception by the NRF, a group aligned with the internationally recognised Yemeni government and Presidential Leadership Council (PLC), based in Aden (Aden governorate). The shipment underscores continued Iranian efforts to arm the Houthis, who have recently resumed strikes on shipping in the Red Sea and continue to target Israel with ballistic missiles (see above). That said, the development is unlikely to materially impact relations between Iran and the US, amid efforts to restore nuclear discussions in the coming weeks and months. The NRF interception underlines moderately increasing risks of vessel boarding and seizures in the Red Sea and near Yemen, primarily as a result of misidentification.

REGIONAL DEVELOPMENTS 

  • Despite the ceasefire, the threat of further Israeli strikes targeting Syrian government-affiliated forces will persist in the coming days, sustaining security volatility in southern Syria. On 15 and 16 July, the IDF conducted tens of airstrikes against the government forces and facilities across Syria. The majority of these strikes targeted concentrations of Syrian Ministry of Defence (MoD) and General Security Service (GSS) forces in Suwayda governorate, amid heavy clashes with Druze clans (see Sibylline Situation Update Brief – 16 July 2025). On 16 July, the IDF significantly increased the intensity and scope of its strikes, targeting the presidential palace and the MoD quarters in the Syrian capital Damascus as a warning to stop the deployment of forces against Druze militias. Other sporadic strikes also took place in Daraa and Rif Dimashq governorates, targeting MoD convoys en route to Suwayda. Israeli strikes were partially halted later that day, following a ceasefire reached between the government and several local Druze factions (likely backed by the US) and the subsequent withdrawal of the MoD forces from Suwayda. However, as of 17 July, the ceasefire remains highly fragile, as the Druze militia figure Hikmat al-Hijri has rejected the ceasefire. As such, in the coming hours, there is a possibility that al-Hijri-affiliated militias will attempt to capitalise on the security vacuum in Suwayda and attack Sunni Bedouin tribes and other pro-government Druze clans, sustaining armed conflict risks in southern Syria. This will, in turn, sustain the threats of Israeli strikes in Suwayda and Daraa targeting local militias affiliated with the government, as well as any Arabic tribal militias from Deir ez-Zor governorate, who will possibly advance towards Suwayda to support the Bedouin tribes. This will sustain significant bystander risks in the proximity of checkpoints, government facilities and military bases in these regions. It will also likely trigger wide disruption across provincial highways connected to Damascus.
  • Increasing government efforts to dismantle Lebanese Hizballah’s (LH) financial capabilities will continue to moderate risks of armed conflict on the Israel-Lebanon border. On 14 July, a circular from Lebanon’s central bank prohibited all licensed financial institutions operating in the country from interacting with unlicensed entities, including those associated with LH. The circular included specific reference to the Al-Qard Al-Hasan Association, which the US sanctioned in 2007 due to its association with LH. The move underscores pressure from the US on Lebanon to dismantle LH’s financial capabilities amid broader disarmament efforts. Non-compliance with the directive will increase risks of account suspension, asset freezes and licence revocation, increasing financial and operational disruption risks for locally engaged firms in the short term. The circular will also increase compliance and regulatory risks for businesses operating in Lebanon, including small businesses seeking interest-free loans. Nonetheless, these measures will reduce money laundering risks and help to constrain terrorist financing activities, moderately reducing conflict escalation risks between Israel and Lebanon. The move will also bolster prospects for greater Lebanese engagement with international markets, moderating long-term socio-economic health risks.
  • A pro-Palestine car ramming attack targeting an Israeli-linked defence contractor highlights targeted activism risks. On 15 July, British police arrested three pro-Palestine activists after they drove a van into the perimeter fence of a factory in Edinburgh (Scotland) belonging to defence manufacturer Leonardo. The alleged perpetrators also vandalised the perimeter with white paint and hung up a Palestinian flag. A newly formed pro-Palestine activist group, ‘Shut Down Leonardo Edinburgh’, claimed responsibility for the attack. It has accused Leonardo of manufacturing laser targeting systems for F-35 fighter jets used by the IDF. The perpetrators were arrested under the Terrorism Act (2000), and Police Scotland’s Counter Terrorism Unit are investigating the incident. The tactics used closely resemble those employed by the Palestine Action (PA) group, which frequently targeted Leonardo’s Edinburgh facilities before UK authorities designated it as a terror organisation in July (see Sibylline Extremism Watch – 4 July 2025). While the act was possibly just inspired by the group, there is a realistic possibility that ‘Shut Down Leonardo Edinburgh’ serves as a proxy to conceal continued PA activity in the UK. Regardless, the incident underscores sustained vandalism and attack risks for Israeli-linked defence, manufacturing and technology firms in the UK and Europe,
  • Syria: Security situation in southern region will remain highly unstable despite ceasefire. Earlier on 17 July, the Syrian Ministry of Defence Forces (MoD) withdrew from Suwayda governorate according to a ceasefire agreement, following days of heavy clashes with Druze militias and Israeli strikes against the government forces (see Sibylline Situation Update Brief – 16 July 2025). The Druze militia affiliated with the religious figure Hikmat al-Hijri refused the ceasefire, but no new clashes have been reported since the deal was announced. This likely indicates internal pressure to suspend hostilities. Nevertheless, the security situation in Suwayda will remain very unstable in the coming days, increasing the risks of a resumption in clashes between Druze factions in the city. Similarly, despite the ceasefire, the threat of new Israeli airstrikes targeting weapon depots and military bases across Syria will likely persist in the coming days; however, the Syrian government is unlikely to retaliate. Furthermore, we assess that any delay in investigating the ethnic killings of the Druze by Jihadist elements in the government forces will likely increase the risks of domestic unrest in other regions with large Druze populations in Syria.

Jul 16.

  • Syria: Clashes in Suwayda will likely expand in scope, intensity; armed conflict risks will be sustained. Earlier on 16 July, clashes persisted in Suwayda governorate between government forces and several Druze factions aligned with the religious figure Hikmat al-Hijri. This comes despite an earlier announcement of a ceasefire. Meanwhile, the Israel Defense Forces (IDF) continued its targeted strikes against gatherings of government forces inside Suwayda city (Suwayda). Earlier on 16 July, it also targeted the entrance of the Ministry of Defence (MoD) in the capital Damascus, likely to convey a warning message to the government. Local media also reported incidents of extrajudicial killings of Druze men carried out by government-aligned Islamists in retaliation for the execution of security force personnel who had surrendered. The ongoing clashes are likely to expand in intensity and scope in the coming 48 hours, as Syrian government forces (as well as their allied Islamist and Druze militias) seek to exert full control over the city. The involvement of rogue jihadist elements is likely, fuelling an ethno-religious dimension of the conflict and increasing risks to civilians. Furthermore, we assess that Israeli airstrikes against government forces in Daraa and Suwayda governorates will likely intensify. Additional Israeli ‘warning shots’ in Damascus remain possible, increasing bystander risks around military facilities therein over the coming 48 hours.
  • Lebanon: New Central Bank rules will moderate terrorist financing, money laundering risks,On 14 July, a circular from Lebanon’s Central Bank prohibited all licensed financial institutions in the country from dealing with unlicensed entities, including those associated with Lebanese Hizballah (LH). They listed Al-Qard Al-Hasan Association as an example, which has been under US sanctions since 2007. The move underscores pressure from the US on Lebanon to dismantle LH’s financial capabilities amid broader disarmament efforts. Non-compliance with the directive will likely lead to legal repercussions, including license revocation, asset freezes and account suspensions, driving financial and operational disruption risks in the short term. The circular will also increase compliance and regulatory risks for companies in Lebanon, including small businesses seeking interest-free loans. Nonetheless, we assess that the new rules will reduce money laundering risks and help to constrain terrorist financing activities, moderately reducing conflict escalation risks between Israel and Lebanon. The move will also drive the prospects for greater international engagement with Lebanese markets, moderating long-term socio-economic health risks.

Jul 15.

Israel: Government will possibly lose majority over conscription issue, increasing risk of unrest. On 14 July, the ultra-Orthodox United Torah Judaism (UTJ) party announced it would exit Prime Minister Benjamin Netanyahu’s coalition government over unmet demands to exempt Yeshiva (seminary) students from mandatory military service. The move leaves Netanyahu’s government with a slim 61-seat majority in the 120-seat Knesset. The 11-seat Shas party has also threatened to withdraw, citing dissatisfaction with Knesset Foreign Affairs and Defense Committee (KFADC) Chair Yuli Edelstein’s bill on the conscription of Yeshiva students. The crisis will heighten government stability risks and undermine the coalition’s credibility. Negotiations over conscription reform will almost certainly intensify in the coming days, with Netanyahu possibly seeking Edelstein’s removal as the KFADC chair to consolidate ultra-Orthodox support. If an agreement is not reached in the coming days, we assess that the risk of Shas also withdrawing will increase. Under such conditions, another no-confidence vote is highly likely, raising the prospects of early elections and likely driving an escalation in anti-conscription, anti-government and pro-government protests (and therefore elevating operational disruption in major cities).

Iraq: Drone attacks underscore persistent threats near Kurdish oilfields, airports, military sites. Earlier on 15 July, an explosives-laden drone targeted the Sarsang oilfield (Duhok governorate) in Iraq’s Kurdistan Region (KRI), resulting in a fire and the temporary suspension of operations. The attack comes hours after another drone targeted the Khurmala oilfield near Erbil city (Erbil governorate). The two incidents are part of a series of unattributed drone attacks targeting various strategic facilities in Kurdistan this month, including Erbil International Airport (EIA), Kirkuk International Airport (KIK, Kirkuk governorate) and the Baiji oil refinery (Saladin governorate). While no group has yet claimed responsibility, it is possible that rogue Shia Islamist groups conducted these small-scale attacks in order to target Kurdish military installations and US troops stationed near Kurdish oil infrastructure. As such, we assess that security and bystander risks will remain elevated around airports, military bases, oilfields, refineries and government facilities across KRI over the coming month. Sporadic and temporary travel disruption, including flight delays and cancellations to and from EIA and KIK, also remain possible during this period.

Key points

  • The Iran-Israel war resulted in substantial damage to Iran’s defensive and offensive capabilities; Tehran’s efforts to reconstitute its external security force capabilities are increasing regional tensions.
  • The relative weakening of Iran’s domestic security and policing capabilities will increase the risk of anti-government protests, domestic unrest and separatist activity in the medium-to-long term amid elevated sensitivity to protest triggers.
  • Israeli and US strikes targeting Iran’s nuclear facilities likely resulted in substantial damage, moderating the prospects for their immediate repair. However, unless negotiations between Iran and the US progress in the coming weeks, efforts to re-develop these nuclear facilities will drive the risk of further Israeli strike action.

Context

Throughout the recent Iran-Israel war (see Sibylline Situation Update Brief – 13 June 2025), Israeli Prime Minister Benjamin Netanyahu stated that Israel’s war goals included neutralising the threat posed by Iran’s nuclear and missile programmes to Israel’s national security. However, Netanyahu also repeatedly called for Iran’s population to engage in a popular uprising and to initiate regime change. Regardless, the war did not trigger an immediate uptick in anti-government protest activity, moderating imminent threats to government stability. Even so, the war likely significantly undermined Iran’s security and policing capacity, diluting its offensive, defensive and repressive capabilities both internationally and domestically.

Forecast

The Iran-Israel war resulted in substantial damage to Iran’s defensive and offensive capabilities; efforts to reconstitute Tehran’s external security force capabilities will likely raise regional tensions. Israel conducted extensive airstrikes targeting Iranian air defences, which severely degraded Iran’s defensive capabilities in western and central parts of the country, including around the capital Tehran. The airstrikes also highly likely undermined Iran’s offensive capabilities; the IDF estimates that it destroyed roughly 35% to 45% of Iran’s ballistic missile stocks and approximately 50% of its ballistic missile launchers. While these estimates are possibly inflated, they likely reflect substantial damage to Iran’s capacity to launch retaliatory strikes against Israel or to engage in sustained hostilities should Israeli strikes resume in the short-to-medium term. In addition, Israeli airstrikes targeting missile production facilities nationwide have likely substantially degraded Iran’s capacity to replenish (at pace) its stocks of medium-to-long-range ballistic missiles, moderating both its deterrent capabilities and capacity to continue transferring munitions to regional proxies. In response to these degraded capabilities, Iran will highly likely seek to reconstitute its air defences, missile production capabilities and general security force capacity through closer relations with China and/or Russia. While Iran will likely primarily seek Russian components to repair existing air defences and to replace non-operational systems, we assess that it will also likely increase imports of Chinese military technology in the coming years, particularly ballistic missile components, solid fuel mixers and fighter aircraft (such as the Chengdu J-10C fighter jet). Deepening relations between Beijing and Tehran are liable to increase compliance concerns for firms in associated sectors; any such warming of ties would possibly aggravate tensions between Beijing and Washington DC amid broader developments in the China-US trade war. More broadly, strikes targeting Iran’s conventional armed forces (Artesh) and Islamic Revolutionary Guard Corps (IRGC) also resulted in numerous casualties, while assassinations targeting high-ranking officials have likely undermined Iran’s security forces’ operational capacity in the short term. In response, the security forces will likely initiate a broader recruitment drive among younger males, increasing labour flexibility concerns for locally engaged firms. Additionally, the security forces (particularly the IRGC) will likely engage in efforts to maximise revenue by further dominating economic activity within Iran, particularly in the energy, metal processing, telecommunications and construction sectors. These efforts will likely compound economic transparency and inefficiency issues within Iran, entrenching sanctions and corruption-exposure risks.

The Iranian intelligence services will almost certainly continue to conduct far-reaching purges of government, security and intelligence service personnel suspected of maintaining links to Israel and/or the US. Foreign and dual nationals will almost certainly face elevated risks of surveillance, harassment and detention. In the medium-to-long term, concerns of widespread penetration of Iran’s security services and communications networks will likely result in increasing inter-agency surveillance, departmental siloing and reduced reliance on technology and electronic communication, disrupting inter-agency collaboration. These trends are likely to reduce the effectiveness of Iran’s internal security services, leading to the duplication of their intelligence-collection efforts. However, they will also possibly confound penetration attempts by adversarial intelligence services. In the long term, this will possibly allow Iran to develop broader non-conventional security force capabilities, increasing its support for proxies, while sponsoring terror attacks targeting Israeli and Jewish institutions and broader organised criminal and militant elements worldwide amid its continued engagement in destabilisation and influence operations.

The Iran-Israel war resulted in substantial damage to Iran’s domestic security and policing capabilities, elevating the risk of anti-government protests, domestic unrest and separatist activity

The Israeli strikes against Basij militia positions, the Ministry of Intelligence and Security (MOIS) and the Law Enforcement Command (LEC) have likely undermined these forces’ capacity to deter, disperse and repress anti-government protests and unrest, particularly in Tehran. While an imminent uptick in widespread and destabilising unrest remains unlikely in the short term, a diminished security and police force capacity will increase the risk of broader unrest in the event of politically or economically sensitive flashpoints in the coming weeks and months. We assess that instances of fuel shortages and/or price increases, electricity shortages, water shortages, socio-economic concerns, commodity shortages and the deaths of high-profile opposition figures in police custody will act as particularly sensitive triggers for anti-government protests, unrest and industrial action in the coming months. The police and security forces are highly likely to respond to any such unrest with heavy-handed and indiscriminate repression, compounding human rights concerns. Escalating unrest in major cities, particularly violent unrest linked to socio-economic concerns, will sustain the risk of operational disruption and broader domestic instability, undercutting the government’s stability in the medium-to-long term. However, threats to government stability are unlikely to turn critical, barring a broader shift in regime dynamics, such as the death or incapacitation of Supreme Leader Ali Khamenei.

As the authorities continue to retain their primary focus on identifying possible Israeli penetration of the intelligence services and deterring destabilising unrest in major cities, separatist and autonomist movements will likely capitalise on lapses in the security forces’ capacity to increase activity and recruitment in Iran’s peripheral regions. Increased separatist activity (including militant activity) will likely be most pronounced in Sistan and Baluchistan province, where militant groups such as Ansar al-Fuqan and Jaish al-Adl routinely conduct attacks targeting the security and police forces (see Sibylline Extremism Watch – Baloch Militancy). Increasing militant activity will drive broader security risks for locally engaged staff and entities operating at port facilities in Chabahar (Sistan and Baluchistan), while also compounding bilateral tensions with Pakistan due to concerns over cross-border militant activity and border security. While they are less active, there is also a realistic possibility that separatist groups associated with Iran’s ethnic-Arab, -Azeri and -Kurdish populations will increase their activity levels. This would elevate the risk of domestic unrest and low-intensity separatist militancy in provinces accommodating significant ethno-religious minority populations, such as Ardabil, East Azerbaijan, Khuzestan, West Azerbaijan and Zanjan provinces, as well as the wider region of Khorasan. In the medium-to-long term, such activity will possibly elevate bilateral tensions with neighbouring countries (particularly Azerbaijan and Iraq), as well as border security concerns, which would possibly constrain cross-border travel and supply chain continuity. Jihadist militant groups will also likely capitalise on the security forces’ diminished capacity to increase activity and recruitment, particularly via online platforms and informal networks. In the medium-to-long term, groups such as Islamic State – Khorasan Province (IS-K) will possibly attempt to conduct higher-capacity and more frequent attacks targeting high-profile public events and locations, as witnessed in the 2024 bombing in Kerman city (Kerman province; see Sibylline Alert – 3 January 2024). This would increase international terrorism and attack risks, particularly in major cities during high-profile religious and state occasions.

Iran’s capacity to develop a nuclear weapon has likely been heavily undermined; its re-development capabilities are also reduced; however, if Iran pursues this option, the risk of Israeli strikes will grow

During the Iran-Israel war, Israel conducted extensive strikes targeting facilities central to all stages of Iran’s potential nuclear weapons development; this included strikes targeting enrichment and conversion facilities in Fordow, Isfahan and Natanz, as well as centrifuge production facilities. Although Iran likely retains substantial stockpiles of low- and medium-enriched uranium, the strikes have highly likely limited Iran’s capacity to enrich (at pace) stockpiles into weapons-grade uranium in the coming months. Israel’s assassination campaign targeting high-ranking Iranian nuclear scientists will also likely delay potential efforts to repair and operationalise enrichment and conversion facilities, while also undermining potential efforts to convert enriched uranium into a functioning munition. Israeli strikes targeting Iranian missile and drone development, storage and launch facilities have also likely limited the feasibility of developing a delivery system for any potential nuclear munition in the short-to-medium term. As such, Israeli and US strikes on Iran’s nuclear and military facilities have highly likely created significant limitations vis-à-vis Iran’s capacity to develop a nuclear weapon rapidly. The continued application of US sanctions on Iran, paired with the Israeli intelligence services’ continued efforts to infiltrate domestic and international supply chains, will likely compound these limitations, further extending the breakout time. If Iran attempts to re-constitute its nuclear programme at pace, the US will highly likely expand sanctions targeting adjacent industries, exacerbating sanction-exposure risks for regionally engaged firms, particularly in the technology, defence, transport and chemical manufacturing industries. Israel’s intelligence penetration of supply chains will also highly likely increase exposure to espionage activity for regionally engaged firms, driving corporate governance and compliance concerns.

Iran’s capacity to re-develop its nuclear capabilities will also likely depend on the status of negotiations with the US. Despite initial US plans to resume negotiations with Iran following the strikes against the Fordow, Isfahan and Natanz facilities, talks have failed to materialise and regional tensions remain elevated. Although there is a realistic possibility that talks will resume in the coming weeks, progress will likely remain contingent on Iran’s willingness to make significant concessions regarding its domestic enrichment of uranium. If Iran fails to meet US demands vis-à-vis scaling back its nuclear programme in exchange for sanctions relief, the US will highly likely continue to intensify the ‘Maximum Pressure’ campaign by expanding sanctions targeting key sectors, including oil exports. This would escalate economic pressure on Iran, triggering a further devaluation of the Iranian rial (IRR) and compounding the country’s socio-economic health concerns. There is a realistic possibility that macroeconomic pressure will also limit Tehran’s financial capacity to invest in the rapid repair and expansion of its nuclear capabilities, further increasing the breakout time. Tehran will also possibly limit nuclear investment due to concerns over domestic unrest, particularly if said investment in its nuclear facilities restricts meaningful spending in critical domestic energy and water management systems (see above). Additionally, if Iran engages in reconstruction and expansion efforts (particularly of its enrichment facilities), the risk of Israel engaging in limited strike action against active nuclear sites will increase substantially. The threat of such strikes would possibly deter significant investment in reconstruction, and, if carried out, would likely further limit Iran’s practical capacity to reconstruct its nuclear programme in the short-to-medium term.

IRAN

  • Despite stating it would ‘co-operate’ with international monitors, Iran’s continued ambiguity relating to its nuclear programme will sustain significant regional tensions and sanction-exposure risks.
  • Allegations that Israel attempted to assassinate Iran’s president during the Iran-Israel war underscore the risk of further crackdowns on individuals associated with anti-government activity.

ISRAEL

  • Pending charges against the prime minister’s advisor will drive government stability and domestic unrest risks across Israel in the coming days and weeks.
  • The attorney general’s likely dismissal will compound domestic unrest risks; it also underscores democratic backsliding in Israel.

PALESTINIAN TERRITORIES

  • Settler violence against Palestinians will likely sustain ethno-religious tensions and drive further clashes in the West Bank.
  • Despite renewed engagement, ceasefire negotiations between Israel and Hamas have failed to progress substantially, sustaining critical security threats within Gaza.

RED SEA

  • The ongoing tensions in the Red Sea, as well as the persistent security risks facing crew members, are underscored amid the aftermath of a Houthi attack against a bulk carrier.

REGIONAL DEVELOPMENTS

  • Israel-Syria: An IDF strike on government forces has increased armed conflict risks in southern Syria, which will possibly impact the ongoing security talks.
  • Iran: Required approval for nuclear watchdog inspections will drive nuclear safety, sanctions risks. On 12 July, Iran’s Foreign Minister Abbas Araghchi stated that, while the country intends to maintain its cooperation with the International Atomic Energy Agency (IAEA), any inspections of nuclear sites will require approval from Iran’s Supreme National Security Council. This process will highly likely be subject to delays and limitations, compounding the IAEA’s restricted ability to access facilities targeted in last month’s bombing campaign by Israel and the US. This will undermine oversight of its nuclear programme and drive nuclear safety risks. We assess that monitoring constraints will increase the risk of the E3 (France, Germany and the UK) triggering snapback clauses, reimposing UN sanctions on Iran for violating the Non-Proliferation Treaty (NPT). This will highly likely sustain significant economic pressure on Iran and exacerbate regulatory and compliance risks for regionally engaged businesses. The announcement also underscores Iran’s ambiguous nuclear policy following the bombings, likely aimed at balancing domestic hardline demands for stronger security guarantees with continued international diplomatic engagement. However, without greater engagement with the US regarding a nuclear agreement, this ambiguity will increase the risk of further Israeli strikes on its nuclear programme.
  • Syria: Clashes in southern Syria will increase risks of wider armed conflict, domestic unrest. On 13 July, heavy clashes between local Bedouin tribal fighters and Druze militias killed at least 30 people and injured 100 others in the city of Suwayda (Suwayda governorate). The clashes were initially triggered by the abduction of a Druze merchant by an unknown group. This prompted Druze militias to encircle and occupy the eastern Suwayda neighbourhood of Maqwas, which is mainly inhabited by Bedouin tribes. The Ministry of Interior has already deployed its forces to Suwayda in a bid to resolve the conflict; however, clashes are still ongoing and uncontained. We assess that the clashes in the city and its suburbs will likely persist through at least the next 24 hours. This will significantly increase bystander and security risks across the governorate and increase the likelihood that provincial highways to the capital Damascus will be cut off. Given the high risk of misfire and misidentification, direct clashes between Druze fighters and the government forces remain possible. This will widen the current scope of armed conflict in the coming days and increase risks of unrest in Suwayda. (Source: Sibylline)

 

15 Jul 25. Israel Strikes Military Tanks in Southern Syria as Sectarian Violence Erupts. Israel’s military struck several Syrian tanks in Sweida province on Monday amid escalating violence in the region, where clashes between Sunni Bedouin tribes and Druze fighters have left dozens dead. The Israel Defense Forces (IDF) released footage of the airstrike on X and said the operation was carried out to stop the tanks from advancing toward the scene of violent clashes in Sweida, a predominantly Druze city near the Israeli border.

“The presence of these assets in southern Syria could pose a threat to the State of Israel. The IDF will not allow the existence of a military threat in southern Syria and will act against it,” the IDF said.

Hours after the strike, Defense Minister Israel Katz said the operation was intended to send “a message and a clear warning to the Syrian regime. We will not allow harm to the Druze in Syria.” Syria’s Interior Ministry reported more than 30 deaths and nearly 100 injuries as violent clashes erupted between Druze militias and Sunni Bedouin tribal fighters in Sweida province on Monday. The Defense Ministry said at least 18 of those killed were members of the security forces. Meanwhile, the UK-based Syrian Observatory for Human Rights reported at least 99 dead, including 60 Druze locals, 18 Bedouin fighters, and 14 security personnel. Shortly after the clashes began, Syria’s Interior Ministry blamed the escalation on the “absence of relevant official institutions.” The ministry added that security forces, in coordination with the Defense Ministry, would “begin direct intervention in the area to end the conflict and impose order.” In a statement, UN’s Deputy Special Envoy for Syria, Najat Rochdi, expressed deep concern over the report and urged “the interim authorities [in Damascus] and local stakeholders to take immediate steps to protect civilians, restore calm, and prevent incitement.” She further stressed the urgent need for “genuine inclusion, trust-building, and meaningful dialogue” to advance Syria’s political transition.

The governor of Suweida, Mustapha al-Bakur, called on residents to “exercise self-restraint and respond to national calls for reform.” Several Syrian Druze spiritual leaders also appealed for peace. Israel has previously vowed to protect the Druze community in Syria. In March, during clashes in Jaramana—a Druze-majority town near Damascus—between Syrian government forces and local Druze gunmen, Katz declared: “Should the regime harm the Druze, it will be struck by us.”

“We are committed to our Druze brethren in Israel to do everything to prevent harm to their Druze brethren in Syria, and we will take all the steps required to guarantee their safety,” Katz added. (Source: https://www.sofx.com/)

 

15 Jul 25.  Israeli Reservists Capture Alleged IRGC Quds Force Cell in Southern Syria. Israeli troops have captured alleged operatives from Iran’s Islamic Revolutionary Guard Corps Quds Force (IRGC-QF) during a covert cross-border raid in southern Syria, the Israel Defense Forces (IDF) said. The operation, conducted on July 7 by reservists from the Alexandroni Brigade and the Military Intelligence Directorate’s Unit 504, targeted Tel Kwdana in Syria’s Quneitra province, near the Israeli-Syrian border. The IDF released video footage of the mission, showing troops advancing into the area during the nighttime raid. The IDF said the suspects were arrested without resistance and later transferred to Israel for further questioning. The military did not specify how many individuals were detained. A report from the UK-based Syrian Observatory for Human Rights said that an Israeli raid in Quneitra on Monday “targeting several homes,” has “ended in the arrest of two brothers.” According to the IDF, the cell captured near Tel Kwdana was preparing attacks against Israeli troops stationed in the demilitarized buffer zone. Lt.-Col. Y, commander of the IDF’s 7012th Battalion, said the suspects had been under surveillance for months. “Iran has been building terror infrastructure across Lebanon, Syria, and Jordan. There are still Iranian elements operating in the region, and it’s our responsibility to stop them,” he told Ynet. The raid marked Israel’s second operation in less than a week aimed at disrupting Iranian-backed activity near the Golan Heights. On July 2, Israeli troops captured another Iran-linked cell. The recent operation followed an earlier raid on June 12, when Israeli forces detained seven Hamas-linked individuals in southern Syria during a 12-day conflict with Iran. Since December, Israeli forces have expanded their presence in the Quneitra region and on the Syrian side of Mount Hermon, citing the need to prevent Iranian-backed militias from filling the vacuum left by the collapse of Bashar al-Assad’s government. The United Nations has condemned Israel’s growing footprint in the buffer zone, calling it a violation of the 1974 disengagement agreement. Israel, however, contends that the accord is no longer enforceable due to the collapse of Syria’s central government. (Source: https://www.sofx.com/)

 

14 Jul 25. Reports say “explosive-laden drone shot down over Erbil Airport” this morning. The Times of India and some Iraq-based media are reporting this morning that an explosive-laden drone was shot down near Erbil International Airport earlier today. The airport is home to a base for US troops and has previously been targeted by drone attacks. A video shared by The Times of India shows an object in the skies near the airport, the object is intercepted and an “explosion” is heard.  Another report, by One India, says the “Iranian drone” was travelling towards the US Consulate. The counterterrorism services of the Kurdistan region said there were no casualties as a result of the action, according to media reports.  There has currently been no official statement from the US Department of Defense. (Source: www.unmannedairspace.info)

 

11 Jul 25. Cuashub.com said today that Houthis resume use of explosive drones in Red Sea attacks. Houthi forces have resumed their use of explosive-laden drones in attacks against commercial shipping in the Red Sea. The recent use of sea drones to sink a commercial ship may mean the campaign that has already disrupted one of the world’s busiest trade routes is once again underway. The latest incident involved a Liberian-flagged merchant vessel, believed to be the Magic Seas, which was attacked Sunday night about 100 kilometers southwest of Hodeida, Yemen. The vessel came under fire from small arms and rocket-propelled grenades before being struck by at least two bomb-carrying drone boats, according to private security firm Ambrey. The crew later abandoned ship as it took on water and caught fire.

“This likely serves as a message that the Houthis continue to possess the capability and willingness to strike at strategic maritime targets regardless of diplomatic developments,” said Mohammad al-Basha, a Yemen analyst with the Basha Report.

The Houthis have since claimed responsibility for the attack, with their media releasing a video of the incident. Ambrey said the target matched the Houthis’ established profile for previous attacks. The group has targeted more than 100 merchant vessels with missiles and drones since November 2023, sinking two and killing four sailors. Maritime experts note that unmanned surface vessel (USV) technology allows for remote attacks at longer ranges and presents a challenge for shipboard defenses. While groups like the Somali pirates have also operated in the region, they have not used drone boats.  The use of USVs in Sunday’s attack follows a pause in Houthi maritime operations after U.S. and allied airstrikes in March. That campaign ended a Houthi-declared ceasefire and temporarily reduced attacks on Red Sea shipping. The recent assault, if confirmed as a Houthi operation, would be the first major use of drones in the red sea since then. The British military’s United Kingdom Maritime Trade Operations center said the ship was struck by “unknown projectiles” and was later abandoned by its crew. The U.S. Navy’s 5th Fleet referred questions to U.S. Central Command, which said it was aware of the incident but provided no further details. https://cuashub.com/en/content/houthis-resume-use-of-explosive-drones-in-red-sea-attacks/ (Source: https://cuashub.com/)

———————————————————————————————————————————————————————————————————————————————————————————————————————————–

Founded in 1987, Exensor Technology is a world leading supplier of Networked Unattended Ground Sensor (UGS) Systems providing tailored sensor solutions to customers all over the world. From our Headquarters in Lund Sweden, our centre of expertise in Network Communications at Communications Research Lab in Kalmar Sweden and our Production site outside of Basingstoke UK, we design, develop and produce latest state of the art rugged UGS solutions at the highest quality to meet the most stringent demands of our customers. Our systems are in operation and used in a wide number of Military as well as Home land Security applications worldwide. The modular nature of the system ensures any external sensor can be integrated, providing the user with a fully meshed “silent” network capable of self-healing. Exensor Technology will continue to lead the field in UGS technology, provide our customers with excellent customer service and a bespoke package able to meet every need.

A CNIM Group Company

————————————————————————————————————————————————————————————————————————————————————————————————————————————–