March 22, 2026

The situation right now Seven days into direct US military strikes on Iranian targets, the conflict has moved faster than most regional risk models anticipated. The current scenario — under ongoing review — is a conflict lasting 2 to 4 weeks, with the US seeking to conclude operations once it assesses sufficient damage has been done to Iran’s offensive capabilities. For businesses operating in the UAE, this is not a distant geopolitical event. The UAE shares a 1,318 kilometre maritime border with Iran across the Strait of Hormuz. Approximately 21 million barrels of oil pass through that strait every day — roughly 21% of global petroleum liquids. Any sustained escalation in targeting of Gulf energy infrastructure changes the operating environment for every business registered in the UAE immediately and materially. This briefing covers what the Iranian regime is prioritising, where the conflict is likely to escalate, what the economic exposure looks like for UAE based businesses, and what practical steps companies operating here should be taking right now. What Iran is actually trying to achieve Understanding Iran’s decision making requires separating what the regime wants from what it can realistically sustain. Priority one is regime survival. Tehran needs a short conflict. The Iranian military is under severe strain. The IRGC is facing internal defections, supply chain disruption, and food security pressure that, while not yet critical, is compounding. A prolonged war of attrition runs directly against the regime’s capacity to maintain domestic control. At the same time, if the conflict continues beyond the initial US strike phase, Iran’s strategic playbook shifts to attrition — increasing pressure on the US indirectly by targeting regional energy infrastructure and Gulf shipping rather than engaging in direct confrontation it cannot sustain. This creates a specific risk profile for the UAE. Iran is unlikely to strike UAE territory directly — the economic and diplomatic consequences would be catastrophic for Tehran and would trigger a far more severe US response. The more probable scenario is pressure applied through proxies, through Strait of Hormuz shipping interference, and through targeted strikes on Saudi and broader Gulf energy assets that create downstream economic disruption without crossing the threshold of a direct attack on a GCC state. Leadership control and who is making decisions The Iranian leadership has been hit hard. Senior figures within the IRGC command structure have been killed or displaced. Prior to the conflict, Iran prepared for exactly this scenario by devolving military decision-making authority — meaning the loss of top leadership does not produce paralysis, but it does change who is in the room. Command and control is being re-established. Current assessments indicate campaign decisions are being taken primarily by hardline IRGC and military commanders rather than civilian or diplomatic voices. This matters for risk assessment because hardline military commanders have a different threshold for escalation than political leadership. The moderating influence of Iran’s elected government on military decision-making has been significantly reduced. For businesses, this means the probability of miscalculation is higher than it would be under normal Iranian command structures. Actions that the civilian leadership would have assessed as disproportionately risky are more likely to be authorised by commanders focused on military objectives rather than geopolitical consequences. Where escalation is most likely: energy infrastructure Energy infrastructure has become the central escalation vector. Iran’s current targeting has relied primarily on drones and short-range missiles — weapons that are effective for sustained pressure but limited in their ability to cause catastrophic damage to hardened targets. The assessment from multiple regional security analysts is that Iran retains higher-capability strategic missile systems that have not yet been deployed. The deployment of these systems would signal a fundamental shift in targeting ambition — from sustained pressure to genuine damage effort against Gulf energy assets. There is an ongoing debate within Iranian military command over whether to strike Gulf energy assets directly. The argument against it is that it would almost certainly bring Saudi Arabia into active alignment with the US and could trigger Emirati defensive posturing. The argument for it is that it is the fastest route to driving oil prices high enough to create Western public pressure for a ceasefire. For UAE businesses, the practical exposure is this: a successful strike on major Saudi oil processing infrastructure — Abqaiq being the most significant single point of vulnerability — would drive oil prices to levels not seen since the 1970s shock, create immediate supply chain disruption across all import-dependent sectors, and trigger the kind of capital flight from emerging markets that historically hits developing market currencies and investment flows hard. The UAE dirham’s peg to the dollar provides significant insulation, but it does not eliminate exposure to the secondary economic effects. Growing challenges within Iran and what they mean for duration The Iranian military is depleting its stocks of drones and missiles faster than it can replenish them. Russia, which has been a key supplier of drone components, is itself under production pressure from the Ukraine conflict. North Korean missile supply lines exist but are logistically constrained. Reducing strike rates do not signal imminent collapse of Iran’s defensive forces. Iran has significant passive defence capabilities, underground facilities, and a large conventional army that has not been engaged. But the offensive capability that made Iran a credible regional threat — its precision missile and drone programme — is under genuine attrition pressure. On the domestic front, there are no immediate signs of organised opposition to the regime capable of threatening its stability. But food insecurity is rising. The Iranian rial has collapsed further since the conflict began. Import disruption is accelerating. The historical pattern — that major Iranian domestic protests have been triggered by economic collapse rather than political grievance alone — is relevant here. If the conflict extends to 6 to 8 weeks, the probability of significant internal social unrest increases materially. For regional businesses, a period of internal Iranian instability following a ceasefire could be more disruptive to regional trade flows than the conflict itself. Iran’s role