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Iran's options

Iran's options

The world is watching: How will Iran respond to the US drone strike that killed Major General Qassim Suleimani?

Iran has already said that it will no longer adhere to limitations on its capacity for uranium enrichment set out under the 2015 nuclear deal. While the Islamic Republic would come up short against the US military in a conventional war, it does have options for retaliation. Here are the most important.

The Iranian coastline borders a Gulf oil shipping route, including the strategic Strait of Hormuz. Any action Tehran might take against tanker traffic or vital oil installations could send oil prices surging. This fear is not unfounded: Just after the attack on Suleimani, prices jumped 4 percent in anticipation of a potential response. And back in September, Iran was blamed for attacks on Saudi oil refineries that briefly knocked 5 percent of global crude production offline.


The Strait of Hormuz is a particular worry. Iran has responded to the tightening of US sanctions in recent months by seizing tankers in the area, and in 2016, seized two US navy boats, taking American sailors hostage. If Iran were to engage in such provocations now, President Trump's response could pull the two countries toward full-blown war. That's not likely, but we can't rule it out.

Iran has also demonstrated cyber capabilities and could lash out at the US and its allies. Oil installations around the Persian Gulf are susceptible to cyberattacks that could severely undermine energy security in the region. This might only form part of Iran's response: "They will want real blood," a former US colonel in military intelligence warned this week.

Tehran's vast network of proxy forces – including Hezbollah in Lebanon, Hamas in Gaza, the Houthis in Yemen, and local militias in Syria and Iraq – could play a key role in escalation between the US and Iran. Some of these groups have affiliates in Europe, Latin America and Africa that could inflict serious damage on US interests in those regions.

Fears that Iraq will become the frontline of US-Iran tensions are well-founded. Baghdad, hoping to placate Iran's rulers – their fellow-Shia patrons – passed a resolution in parliament over the weekend to expel US troops from Iraq. (Shia lawmakers voted in favor of the resolution while many Sunni and Kurdish members, who are more supportive of US troops being in Iraq, sat out the vote.) While it's unclear how this might play out, it is a worrying sign for President Trump, who has already threatened to impose sanctions on Iraq if US troops were required to leave the country.

Iraq is a long-term US partner and a foothold for US troops in the Middle East. A US withdrawal from Iraq would severely undermine America's ability to lead the fight against the Islamic State. Speaking to Axios, a US official explained: "It hasn't escaped ISIS' attention that Iraq is in something of disarray right now."

The bottom line: All-out war between the US and Iran remains unlikely, but there is much short of war that can still go very wrong.

Khant Thaw Htoo is a young engineer who works in Eni's Sakura Tower office in the heart of Yangon. As an HSE engineer, he monitors the safety and environmental impact of onshore and offshore operations. He also looks out for his parents' well-being, in keeping with Myanmar's traditions.

Learn more about Khant in the final episode of the Faces of Eni series, which focuses on Eni's employees around the world.

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Biden's first scheduled call with a world leader will be with Canada's Justin Trudeau. What's going on with the Keystone Pipeline?

Well, Biden said that that's it. Executive order, one of the first is that he will stop any construction or development of the Keystone Pipeline. This is of course an oil pipeline that would allow further oil sands oil to come to the United States. The infrastructure is significantly overstretched, it's led to backlogs, inefficiency, accidents, all the rest, but it also facilitates more energy development and keeps prices comparatively down if you get it done. So, there are lots of reasons why the energy sector in Canada wants it. Having said all of that, Trudeau, even though he's been a supporter of Keystone XL, let's keep in mind that he did not win support in Alberta, which is where the big energy patch in Canada is located. This is a real problem for the government of Alberta, Canada is a very decentralized federal government, even more so than the United States. The premier of Alberta is immensely unhappy with Biden right now, they've taken a $1.5 billion equity stake in the project. I expect there will actually be litigation against the United States by the government of Alberta. But Trudeau is quite happy with Biden, his relationship was Trump was always walking on eggshells. The USMCA in negotiations ultimately successful but were very challenging for the Canadians, so too with the way Trump engaged in relations on China. All of this, the fact that Trump left the nuclear agreement with Iran, the Paris Climate Accords, WHO, all of that is stuff that Trudeau strongly opposed. He's going to be much more comfortable with this relationship. He's delighted that the first call from Biden is to him. And it certainly creates a level of normalcy in the US-Canada relationship that is very much appreciated by our neighbors to the North.

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The GZERO World Podcast with Ian Bremmer. Listen now.

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