With leaders of the North Atlantic Alliance—along with dialogue partners from across the Indo-Pacific region—in Washington set to begin their consultations on July 9, they will have the opportunity to frame strategic responses to the shifting geopolitics of great power competition. Here are a few “action items” that should be on the summit agenda. More NATO Flashpoints Outside Alliance Borders
As Russia’s invasion of Ukraine grinds on, incrementally destroying the country’s economy, infrastructure, and productive capacity, the NATO alliance must remain vigilant regarding additional escalating tensions outside its theater boundaries. These include Moldova, sandwiched between Ukraine and NATO member Romania; Georgia, which Russia invaded in 2008 to carve out two breakaway pro-Moscow republics; the ongoing conflict between energy-rich Azerbaijan and increasingly impoverished Armenia; and the Balkans, where ethnic Serbs threaten to secede from Bosnia thirty years after regional conflicts resulted in the killings of 150,000 Europeans. None of these potential actions or hostilities violate any NATO sovereignty or territory, which leads to the question of whether and how the alliance would respond to a series of additional out-of-area mini-crises or wars as in Ukraine. Whether President Joe Biden is re-elected, or former President Donald Trump is elected to a second term, the White House in 2025 can be expected to call on delinquent alliance members to spend at least 2 percent and as much as 3 percent of GDP on defense procurement to free up scarce US forces and assets for re-deployment in the increasingly precarious Indo-Pacific region. Strategic Deterrence to Protect Their National Security and Uphold the Global Trading System
In conjunction with the US intelligence community’s 2024 Annual Threat Assessment, Director of National Intelligence Avril Haines testified before the Senate and House Intelligence Committees in April 2024 that the international security landscape is marked by an “increasingly fragile world order” that is testing and challenging US primacy on multiple fronts, “including great power competition with an ambitious, but anxious China in Asia and a confrontational Russia in Europe,” as well as regional conflicts afflicting the Middle East since the October 7 Hamas multi-pronged invasion of southern Israel. The multiplying, intensifying disruptions occurring in several of the most critical regions of the world are roiling the strategic planning of corporate executives and investment managers, especially in national and global energy markets. During the first half of 2024, US arch-rivals and lesser adversaries increasingly perceived American deterrence capabilities as weakened and therefore less credible. Assessing and Coping with Iran’s Multiple Threats Across the Middle East
Hamas could not have perpetrated the sadistic atrocities against thousands of Israeli civilians without years of active training, organizing, and financing of its terror operations by Iran. Since the radical Shia theocracy took power in Tehran in the 1979 revolution, the Iranian regime has been actively encircling, threatening, and attacking Israel, its Gulf regional neighbors, and US personnel, bases, and regional assets through a series of proxy terror groups and organizations. Together, Hamas in Gaza, Hezbollah in Lebanon, Houthis in Yemen, and Shia militias in Syria and Iraq comprise the Iranian-led “Axis of Resistance” across the Middle East: from Iran to the eastern border with Afghanistan and Pakistan, as far west as the Mediterranean coast of Syria, Lebanon, and Israel, and south to the Horn of Africa and the Arabian Sea.
The Axis is overseen by the Quds Force, the overseas arm of Iran’s military elite known as the Islamic Revolutionary Guards Corps. Tehran’s Shia theocracy has actively trained thousands of Hamas terrorists, with the State Department estimating financial support of up to $100 million annually since it seized power from the Palestinian Authority in Gaza in 2007. Much of the financing for these operations now comes from the spike in Iranian oil sales to China, especially since 2021, as Washington has relaxed US sanctions against Iranian oil buyers in an effort to coax Tehran to the negotiating table to restore the multi-national nuclear agreement. Tehran is believed to have earned $100 billion from renewed oil exports, about 90 percent of those to China.
The most important strategic asset of the Iranian-led axis is Hezbollah, deployed north of Israel in Lebanon. Iran has armed and trained about 40,000 Shia Hezbollah fighters, having invested between $700 million and $1 billion annually for years, dating back to the early 1980s.
The State Department describes Hezbollah as “the most technically capable terrorist group in the world.” Possessing more than 150,000 missiles and rockets aimed at Israel, increasingly armed with precision-guided technology, Hezbollah acts as the primary deterrent hedge against a major Israeli attack on Iran’s nuclear energy and weapons facilities. Global Shipping Under Assault in the Vital Red Sea Chokepoint
About fifteen years ago, Iran began arming Houthi rebels in Yemen, in the southwestern corner of the Arabian Peninsula astride the Bab al-Mandab strait: one of the world’s most important waterways and shipping chokepoints, through which about 12 percent of global shipping in volume passes annually. The Houthis declared solidarity with Hamas and continue attacking global shipping in the Red Sea, choking off regional sea lines of communication between the Indian Ocean and the Mediterranean Sea, disrupting European supply chains and rerouting commercial and energy shipping. Previously, about sixty ships daily crossed the Red Sea north towards Egypt’s Suez Canal or south into the Arabian Sea to turn east either to energy rich Gulf ports or the maritime superhighway across the Indian Ocean enroute to East Asia markets. Red Sea shipping has since collapsed by 80 percent and container ships are being re-routed around Africa, causing two-to-three-week delays, overburdening African ports with surging shipping traffic, and adding costs to international commerce between Europe, the Middle East, and Asia.
Iran’s unprecedented barrage of ballistic missiles, cruise missiles, and drones against Israel in April is the first such direct military attack launched from Iranian soil, after decades of hiding behind its many regional terror, militia, and proxy forces. Israel’s complex Iron Dome defenses successfully destroyed the barrage with intelligence input from Saudi Arabia, Jordan, and the United Arab Emirates. Whether Iran’s failed attack was the outcome of strategic incompetence, hardware failures, or a deliberate decision to avoid escalation and re-establish deterrence remains speculative. Israel retaliated with a modest yet sharply-focused attack near Iran’s major nuclear facility, demonstrating its ability to evade Iranian missile defenses and destroy nearby air bases—as well as Iran’s valued nuclear related facilities. Israel remains the Middle East’s only nuclear power, with as many as eighty to 300 land-based nuclear-tipped missiles in hardened silos, on sophisticated fifth-generation aircraft and on submarines on near-constant patrol in the eastern Mediterranean Sea near its Haifa port, against which Tehran currently possesses zero capability to prevent from reaching targets in westernmost Iran.
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