Iran & Iraq: A deadly new crisis with the US

  • We believe that de-escalation will continue following statements from both the Iranian and US leadership. Although both parties tentatively appear to be standing down, this could break down easily and retaliatory acts could resume.
  • The crisis will shelve (but not necessarily kill off) the JCPOA nuclear deal. It will also bolster the hardliners in Iran ahead of elections in February, making the dire state of the economy a secondary issue.
  • Iraq, where both attacks took place, will bear much of the initial brunt. The presence of US troops is already an open wound, complicating any moves towards a stable government.

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