Iran: Retaliation Calculus at the Threshold of an Existential Threat

US kinetic strikes against Iran remain likely, with Iranian leadership assessing that a direct conflict with the US - and potentially Israel - is a near-term risk. Washington has positioned sufficient military assets in the region to execute strikes against Iranian targets, including a carrier strike group in the Persian Gulf, accompanying destroyers armed with Tomahawk cruise missiles, additional fighter aircraft, and electronic warfare platforms capable of degrading Iranian air defenses. Two additional US Navy destroyers have been deployed near the Strait of Hormuz amid repeated Islamic Revolutionary Guard Corps (IRGC) threats to disrupt or close the maritime chokepoint. President Donald Trump has reinforced this posture through direct threats, stating that "there is another beautiful armada floating beautifully towards Iran right now," while adding that Iran "should have made a deal the first time" and reiterating that he hopes Tehran will "make a deal.” From Tehran's perspective, a US strike is increasingly viewed as an existential threat to regime survival - significantly altering Iran's retaliation calculus and increasing the likelihood of a broader, less constrained response. 

• Iranian domestic preparations further suggest expectations of sustained disruption. Emergency authorities granted to provincial governors enable continuity of governance and alternative supply mechanisms for essential goods, signaling that Iranian leadership is preparing for conflict while simultaneously seeking to mitigate internal unrest.
• Ultimately, the trajectory of US-Iran tensions will hinge on Trump's decisions, given the highly centralized nature of US decision-making and the limited influence of diplomatic intermediaries at this stage.

Both the US and Iran are poised for confrontation. Iran has clearly indicated its willingness to expand the scope of retaliation in the event of escalatory US strikes. This rhetoric is reinforced by the country's substantial arsenal of short- and medium-range ballistic missiles, cruise missiles, and drones, which provide Tehran with a credible capacity to strike both Israel and US forces across the region. While Iran's regional proxy network is no longer the primary driver of its power projection, these actors remain useful instruments for limited escalation. Iranian-aligned militias in Iraq retain the capability to target US and other Western governments' diplomatic facilities, particularly in Baghdad. 

• Given Iran’s perception that a US strike constitutes an existential threat to regime survival, the risk of escalation against US military facilities in Bahrain, Kuwait, Iraq, and Syria, as well as direct or indirect strikes against Israeli targets, is high.
• While the suspension of commercial airline services would serve as an early warning indicator, formal airspace closures would signal a far more serious escalation threshold.

Even a limited US strike against Iran would likely alter the regional security environment immediately, prompting an Iranian response calibrated to signal resolve while attempting to manage escalation. Such a response could include selective missile or drone launches, cyber operations, or deniable proxy activity designed to demonstrate Iran's willingness and capability to impose costs without triggering a full-scale conflict. However, broader or sustained US military operations would almost certainly push Tehran toward a far more expansive retaliatory campaign.  

US and allied diplomatic missions, particularly in Iraq, would face elevated risk from Iranian-aligned militias despite the degraded state of Iran's proxy network. Aviation, maritime traffic, and commercial operations across the Gulf and eastern Mediterranean would likely experience sustained disruption, stemming from airspace closures, heightened military activity, and insurance or regulatory constraints.

Finally, Iran's internal emergency measures suggest that Tehran is preparing for prolonged disruption rather than a short, symbolic exchange. These preparations are intended not only to sustain the state during conflict but also to mitigate domestic instability by maintaining access to basic goods and services. This dual-track approach indicates Iranian leadership is seeking to avoid a scenario in which external military pressure coincides with internal unrest—an outcome that Tehran appears to assess as a critical vulnerability in a prolonged confrontation. 

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