EXECUTIVE SUMMARY
On the eve of a third round of indirect United States–Iran nuclear negotiations in Geneva, scheduled for 27 February 2026 and brokered by Oman, the international system confronts one of its most consequential strategic inflection points since the 2003 invasion of Iraq. The stakes extend far beyond enrichment levels and inspection protocols. At issue is the resilience of American extended deterrence, the credibility of coercive diplomacy, the structural alignment of revisionist powers, and the stability of the global energy system.
The United States has assembled what appears to be its most significant regional military posture in more than two decades: two carrier strike groups, forward-deployed fifth-generation aircraft, cruise-missile–equipped destroyers, and rotational strategic bombers. Tehran, for its part, stands at what some U.S. intelligence assessments describe as a threshold nuclear capability—measured in weeks to accumulate sufficient fissile material for a device if it chose to proceed. Iranian officials dispute both the characterization and the intent, framing their program as lawful and reversible within negotiated constraints.
Simultaneously, diplomacy has not collapsed. Iranian Foreign Minister Abbas Araghchi has described the preliminary discussions as “surprisingly encouraging,” while U.S. officials signal conditional openness to a revised framework beyond the parameters of the 2015 Joint Comprehensive Plan of Action (JCPOA). The coexistence of escalatory military positioning and cautiously constructive diplomatic engagement produces a classical game-theoretic environment of incomplete information, signaling ambiguity, and brinkmanship under uncertainty.
This paper offers a structured Bayesian analysis of the confrontation. It assigns probability weights to four principal strategic pathways and evaluates payoff matrices for the primary actors: the United States, Iran, Israel, China, Russia, and the broader international system. It pays particular attention to two systemic risks of immediate relevance to G7 leadership:
Attritional entanglement risk — the possibility that a limited coercive campaign evolves into a protracted, Iraq- or Afghanistan-style exhaustion dynamic, degrading U.S. strategic credibility.
Revisionist opportunity risk — the structural incentives facing China and Russia to permit, or indirectly facilitate, prolonged American military absorption in the Persian Gulf, thereby redistributing strategic bandwidth in the Indo-Pacific and Eastern Europe.
The central analytical conclusion is sobering: the scenario that most weakens the liberal international order—an inconclusive, sustained air-and-missile confrontation that neither topples the Iranian regime nor decisively halts nuclear progress—is also the scenario that offers the greatest relative utility to Beijing and Moscow at comparatively low marginal cost. A rapid, limited coercive success would impose risks on Iran but would not necessarily produce net gains for revisionist powers; a negotiated settlement would constrain escalation while stabilizing energy markets. It is the middle pathway—neither decisive war nor durable agreement—that maximizes strategic asymmetry against Western cohesion.
For G7 governments, the Iran file must therefore be conceptualized not as a discrete nuclear compliance dispute but as a multi-actor strategic contest embedded in global power transition dynamics.
KEY FINDING FOR G7 LEADERS
Diplomatic success—defined as a verifiable arrangement that constrains enrichment levels, restores monitoring mechanisms, and reduces immediate escalation risks—is the only scenario that simultaneously advances U.S. credibility, Iranian regime security, regional stability, and global economic continuity.
All plausible military pathways generate asymmetric advantage for China and Russia by:
Absorbing U.S. precision munitions inventories,
Fixating American force posture in the Gulf,
Exposing capability ceilings under real combat conditions,
Increasing global energy volatility,
And amplifying perceptions of systemic fragmentation.
In this specific configuration of incentives, strategic rationality and humanitarian prudence converge.
PART I: THE STRATEGIC LANDSCAPE AS OF 25 FEBRUARY 2026
I.i. Operation Midnight Hammer and Its Contested Legacy
In June 2025, the United States and Israel conducted coordinated strikes on three principal Iranian nuclear facilities in what was publicly designated Operation Midnight Hammer. President Donald Trump subsequently declared that the strikes had “obliterated” Iran’s nuclear program.
Subsequent developments complicate that assessment.
Iran suspended cooperation with inspectors from the International Atomic Energy Agency (IAEA), limiting independent damage verification. Public statements by U.S. special envoy Steve Witkoff in February 2026 suggested that Iran could be approximately one week from accumulating bomb-grade fissile material—if it chose to proceed. If accurate, this would imply that the June 2025 strikes achieved, at best, a temporal setback rather than a structural dismantlement.
Iranian officials frame the episode differently. They assert that while certain facilities sustained damage, core scientific infrastructure and technical expertise remain intact. Moreover, Iranian missile capabilities, according to statements by Foreign Minister Araghchi, are in a “better situation” than before the strikes—an assessment likely intended as deterrent signaling but nonetheless indicative of continued investment in conventional and asymmetric strike capacity.
A further complication is Iran’s expanding defense relationship with China. Tehran has reportedly integrated elements of Chinese air defense technology, including the YLC-8B 3D radar and the HQ-9B surface-to-air missile system. Whether these systems materially alter the operational calculus of U.S. airpower remains debated among defense analysts; however, their presence increases uncertainty in any future strike planning.
From a Bayesian perspective, Operation Midnight Hammer updated the belief distributions of all players:
United States updated upward its estimate of Iranian resilience and underground dispersal capacity.
Iran updated upward its estimate of U.S.–Israeli willingness to use force.
China and Russia updated upward their assessment of Iran’s long-term strategic dependency on non-Western security partners.
Regional actors updated upward their perception of escalation volatility.
The result is not equilibrium, but a more complex information environment.
I.ii. The Current Military Posture
As of late February 2026, U.S. force disposition in or near the Persian Gulf includes:
The USS Abraham Lincoln Carrier Strike Group operating approximately 700 km from Iran’s coastline.
The USS Gerald R. Ford Carrier Strike Group transiting toward the region.
F-22 aircraft from Langley Air Force Base.
F-35 aircraft operating from Muwaffaq Salti Air Base.
Multiple guided-missile destroyers equipped with Tomahawk cruise missiles.
Rotational strategic bomber deployments.
This configuration constitutes the largest visible U.S. concentration of naval and air power in the region since the Iraq invasion.
Iran’s response has been primarily rhetorical and asymmetric. Supreme Leader Ali Khamenei and IRGC Commanders warned publicly of Iran’s ability to threaten U.S. naval assets. While such statements serve deterrent signaling purposes, Iran’s strategic doctrine historically emphasizes missile saturation, drone swarms, proxy activation, and maritime disruption in the Strait of Hormuz.
In mid-February 2026, China, Russia, and Iran concluded the eighth iteration of the “Maritime Security Belt” naval exercise in the Strait of Hormuz. Although previous exercises have occurred, the timing—amid acute escalation—heightens symbolic significance. Reports of PLA cargo aircraft flights to Iran in January 2026 and the signing of a trilateral strategic charter between China, Russia, and Iran further signal a deepening of coordination.
None of these developments constitute a formal alliance. However, they reduce Iran’s isolation and complicate U.S. escalation dominance assumptions.
I.iii. The Diplomatic Track Parallel to military escalation, diplomacy persists.
Since early February 2026, three rounds of indirect negotiations between U.S. and Iranian representatives have been held in Geneva, mediated by Oman. Both parties characterize the talks as cautious but constructive. Iranian officials have proposed “guiding principles” for a potential agreement and are reportedly preparing a written draft framework.
Araghchi has suggested that elements under discussion could surpass the JCPOA in scope or durability, while also indicating that Washington has not formally insisted on zero enrichment—a position long considered politically untenable in Tehran. President Trump, conversely, has stated publicly that Iran seeks a deal but has not yet committed to complete nuclear renunciation.
The structural tension is acute. President Trump reportedly set a 10–15 day decision window in mid-February, placing the current moment at or near that deadline. Simultaneously, Tehran describes the U.S. military buildup as coercive pressure incompatible with constructive negotiation.
Thus, as of 25 February 2026, the strategic environment is characterized by:
Maximum visible U.S. military leverage,
Iranian nuclear threshold proximity (disputed but strategically consequential),
Active Chinese and Russian diplomatic-military engagement,
Ongoing mediated talks with uncertain durability.
From a Bayesian standpoint, both Washington and Tehran face incomplete information regarding the other’s reservation price, domestic political constraints, and escalation thresholds. Each must infer intent from signals that are themselves strategically curated.
The third round of negotiations on 27 February 2026 may clarify these priors. A fourth round has not yet been confirmed.
PART II: GAME STRUCTURE, PLAYER TYPES, AND STRATEGIC PAYOFFS
II.i. Methodological Note: Why a Bayesian Framework
The current U.S.–Iran confrontation is not a classical deterrence standoff between fully transparent actors. It is a strategic interaction under incomplete information—precisely the domain of Bayesian game theory.
In a Bayesian game, actors do not know with certainty the “type” of their opponent. A type represents underlying preferences, resolve, risk tolerance, and political constraints. Players observe signals—public statements, troop deployments, diplomatic gestures—but these signals are noisy and often strategically curated. They update their beliefs as new information arrives, revising probability distributions over possible opponent types.
This framework is particularly suited to the present crisis for three reasons:
First, it models the interaction between coercive signaling and diplomatic overtures. Tehran’s signals of openness to negotiation coexist with public declarations of defiance. Washington’s large-scale military deployments coexist with continued indirect talks. Bayesian modeling allows us to assess how these mixed signals alter each side’s belief about the other’s reservation price.
Second, it incorporates third-party strategic updating. China and Russia are not passive observers; they are conditional actors whose strategies depend on their assessment of U.S. endurance and Iranian resilience. A Bayesian structure captures how their expectations shift under different U.S. choices.
Third, it allows structured scenario weighting rather than binary forecasting. Instead of asking “Will there be war?”, the model distributes probabilities across multiple strategic equilibria, recognizing that outcomes depend on evolving belief updates.
The probability estimates used in this paper are informed by current intelligence reporting, open-source analysis, and expert consultation. They are not mechanically derived from classified datasets nor presented as deterministic forecasts. They represent structured analytical judgments as of 25 February 2026 and should be treated as decision-support tools under uncertainty.
II.ii. Principal Players and Type Spaces
The United States: Coercer or Dealer?
The United States operates under genuine type ambiguity. President Donald Trump has publicly emphasized coercive leverage and deadlines, yet reporting consistently suggests a strong aversion to becoming politically entangled in a large-scale Middle Eastern war. The administration appears internally heterogeneous: some officials prioritize maximal dismantlement demands aligned with Israeli preferences, while others favor a narrower nuclear-focused settlement.
For modeling purposes, the U.S. can be conceptualized as a two-type actor:
“Coercer” (probability 0.45) — willing to initiate or sustain military action to compel structural concessions.
“Dealer” (probability 0.55) — prioritizes a negotiated agreement, using military pressure primarily as leverage rather than as an end in itself.
Current signals—simultaneous force concentration and continued talks—leave posterior probabilities relatively balanced, with a slight tilt toward the Dealer type.
This ambiguity is itself strategic: uncertainty enhances bargaining leverage but increases miscalculation risk.
Iran: Defiant but Transactional
Iran’s leadership presents a unified public posture emphasizing sovereignty, deterrence, and resistance. Supreme Leader Ali Khamenei and IRGC leadership frame capitulation as existentially costly. At the same time, Iranian diplomats have signaled openness to structured nuclear constraints under conditions that preserve regime survival and strategic autonomy.
Iran can therefore be modeled as:
“Defiant-but-Transactional” (probability 0.70) — unwilling to abandon missile capabilities or regional influence networks, but prepared to negotiate nuclear parameters to prevent war and secure sanctions relief.
“Strategic Submission” (probability 0.30) — willing to accept far-reaching constraints only if confronted with overwhelming military pressure and deteriorating domestic stability.
The higher probability attached to the Defiant-but-Transactional type reflects long-term regime behavior since 2018: calibrated escalation combined with selective diplomacy.
China: Opportunistic Stabilizer
China is a third-party player with asymmetric exposure. Beijing benefits from sustained U.S.–Iran tension insofar as it diverts U.S. attention and resources from the Indo-Pacific. However, it does not benefit from uncontrolled regional war that disrupts energy flows or forces overt alignment.
China’s optimal strategy is therefore conditional:
Encourage U.S. distraction without direct entanglement.
Provide Iran with selective support (economic, technological, limited military assistance) while preserving deniability.
Avoid triggering secondary sanctions or coalition formation against itself.
Beijing’s payoff function is highly sensitive to duration rather than intensity of conflict. A short, decisive event yields limited gains; prolonged American absorption yields strategic dividends.
Russia: Enabler Under Constraint
Russia operates under similar incentives but with more constrained resources due to its ongoing commitments in Eastern Europe. Its contributions are primarily political and technical: intelligence cooperation, air defense reconstruction contracts, and diplomatic shielding in multilateral forums such as the United Nations Security Council.
Moscow benefits from:
Elevated energy prices,
Western strategic distraction,
Reinforced narratives of American overreach.
However, it lacks the material capacity to fundamentally alter battlefield dynamics in the Gulf without incurring high costs.
Israel: Alignment with Friction Potential
Israel functions as a principal actor whose preferences significantly shape U.S. decision space. Prime Minister Benjamin Netanyahu has historically favored maximalist objectives: dismantlement not only of enrichment capacity but also missile programs and proxy networks.
An emerging divergence may exist between Israeli strategic maximalism and a narrower U.S. nuclear objective. This divergence does not imply rupture but introduces intra-coalitional bargaining complexity. In Bayesian terms, Israel influences U.S. type perception—particularly the probability assigned to the Coercer type.
II.iii. Analytical Payoff Structure (Narrative Form)
To evaluate strategic incentives, we model four principal scenarios and assign net strategic utility values on a scale from –10 (catastrophic loss) to +10 (decisive gain). These values incorporate material outcomes, reputational effects, alliance cohesion, economic consequences, and systemic implications.
Rather than presenting a mechanical table, the payoffs are interpreted analytically below.
Scenario 1: Diplomacy Succeeds
Under this outcome, a negotiated agreement constrains enrichment levels, restores monitoring mechanisms, and reduces immediate escalation risk.
United States (+4): Gains reputational credit for crisis management without incurring war costs. Military credibility is preserved rather than tested. Some domestic criticism persists, but systemic stability is reinforced.
Iran (+5): Secures regime survival, partial sanctions relief, and avoidance of infrastructure devastation. While accepting constraints, it retains core state continuity.
China/Russia (+2): Benefit modestly from oil market stability and continued access to Iranian markets but lose the opportunity to exploit U.S. military overextension.
This is the only scenario producing positive utility for all major actors simultaneously.
Scenario 2: Short Air Campaign, Iran Yields
The United States conducts limited strikes; Iran absorbs damage and accepts significant concessions.
United States (+3): Achieves coercive credibility but at financial cost and with residual escalation risk. Victory is tactical rather than transformational.
Iran (–4): Suffers infrastructure damage and reputational loss. Regime survives but under humiliation and economic strain.
China/Russia (+3): Even in a short campaign, they gain intelligence insights into U.S. capabilities and observe munitions expenditure. U.S. distraction creates modest strategic openings elsewhere.
This scenario offers the United States a visible but not decisive gain, while revisionist powers still accrue secondary benefits.
Scenario 3: Prolonged Attritional Conflict
An initial strike evolves into sustained air, missile, and proxy exchanges over months or longer.
United States (–5): Faces munitions depletion, fiscal burden, alliance strain, and reputational erosion reminiscent of Iraq or Afghanistan dynamics. Even absent ground invasion, prolonged engagement undermines strategic flexibility.
Iran (–3): Suffers economic hardship and infrastructure degradation but leverages nationalism and asymmetric tactics to preserve regime continuity.
China/Russia (+6): This is their optimal environment. U.S. attention is diverted; Indo-Pacific deterrence bandwidth narrows; energy prices fluctuate in ways that benefit exporters and complicate Western economies.
This scenario generates the sharpest asymmetry in favor of revisionist actors.
Scenario 4: Regional Escalation and Hormuz Disruption
Conflict expands, potentially involving closure or severe disruption of the Strait of Hormuz, drawing in regional actors and triggering global recession.
United States (–7): Suffers economic blowback, coalition stress, and severe systemic credibility costs.
Iran (–5): Faces existential economic damage but may frame confrontation as defensive resistance.
China/Russia (+4): Energy leverage increases; dollar volatility expands; Western cohesion is tested. However, extreme instability introduces uncontrollable spillovers.
While risky for all, even this high-escalation pathway does not produce net-negative utility for revisionist powers comparable to that experienced by the U.S.-led system.
Structural Insight from the Payoff Distribution
The payoff analysis reveals a structural asymmetry:
Diplomatic resolution produces modest but positive utility across actors.
All military scenarios generate net-negative utility for the United States relative to China and Russia.
The longer the conflict endures, the greater the relative strategic benefit to Beijing and Moscow.
This alignment between game-theoretic incentives and diplomatic prudence is analytically significant. In many crises, moral imperatives and strategic incentives diverge. In this case, they converge: the equilibrium that stabilizes the region is also the equilibrium that prevents structural advantage transfer to revisionist powers.
For G7 decision-makers, the implication is clear. The Iran crisis should be evaluated not solely through a nonproliferation lens, but through the broader architecture of systemic competition and alliance cohesion.
PART III: SPECIAL CASE ANALYSIS I — THE ATTRITION TRAP
III.i. The “Weaker Adversary” Fallacy
A recurring analytical error in American strategic culture has been the conflation of conventional military superiority with political inevitability. This pattern appeared in Vietnam War, reemerged in War in Afghanistan, and was evident in the post-2003 phase of the Iraq War. In each case, the United States possessed overwhelming conventional advantages. In each case, those advantages proved insufficient to guarantee durable political outcomes aligned with initial war aims.
Iran, by conventional metrics, is categorically weaker than the United States. Its GDP is a small fraction of that of the United States; its air force relies heavily on legacy platforms acquired prior to 1979; its blue-water naval capacity is limited; and in open-ocean confrontation it would not match U.S. carrier strike groups. These assessments are accurate in narrow military-technical terms.
They are strategically incomplete.
The relevant question is not whether the United States can inflict overwhelming damage on Iranian infrastructure. It demonstrably can. The relevant question is whether the infliction of that damage produces the desired political outcome—namely, Iranian capitulation on nuclear and regional terms—within acceptable fiscal, reputational, and temporal boundaries.
The historical record since the 1991 Gulf War suggests that translating military superiority into political compliance is not automatic, particularly against actors that:
Possess territorial depth,
Frame conflict in existential terms,
Maintain coherent national command structures,
And are prepared to absorb punishment without regime fragmentation.
Iran is neither a failed state nor a fragmented militia network. It is a territorially integrated nation-state of approximately 90 million people with functioning institutions, a centralized security apparatus, and a leadership that consistently frames strategic confrontation as existential. This framing may be rhetorical, but in Bayesian terms it raises the cost of capitulation for Tehran and lowers the probability that coercion alone induces surrender.
Military asymmetry, therefore, does not imply strategic asymmetry in political resolve.
III.ii. Operational and Logistical Constraints
A sustained air-and-missile campaign against Iran presents operational challenges of a different order than those encountered in permissive counterterrorism theaters.
Geographic Depth
Iran’s geography imposes nontrivial constraints. The distance from the Persian Gulf littoral to strategic targets in northern Iran approaches 1,300 miles. Aircraft operating from carriers or regional bases must traverse extended distances, often requiring multiple aerial refueling cycles both inbound and outbound. Aerial refueling platforms—tankers—constitute the logistical backbone of sustained operations. They are large, comparatively slow, and limited in number in-theater. Protecting them becomes an operational priority, adding further complexity to sortie planning.
Geography, in this case, dilutes tactical superiority.
Integrated Air Defense Evolution
Since the June 2025 strikes, Iran has reportedly strengthened elements of its air defense architecture, including integration of Chinese-supplied systems such as the YLC-8B radar operating in UHF frequencies and the HQ-9B surface-to-air missile system. UHF radar bands can complicate stealth optimization profiles of aircraft such as the F-35 and F-22, though they do not negate stealth advantages outright.
More broadly, Iran’s defensive doctrine emphasizes layered denial: radar coverage, mobile SAM batteries, decoys, electronic warfare, and rapid relocation. Even if U.S. forces degrade these networks early in a campaign, the suppression of enemy air defenses (SEAD) mission would likely be ongoing rather than one-off.
The United States has spent two decades primarily operating in uncontested or lightly contested airspace. High-intensity, integrated air defense suppression against a territorially large state is operationally distinct from counterinsurgency-era air campaigns. The institutional experience gap does not imply incapacity—but it does imply elevated risk and friction relative to recent historical norms.
Maritime Vulnerability and Anti-Access Capabilities
Iran’s doctrine places particular emphasis on anti-access/area denial (A2/AD) in the Strait of Hormuz and surrounding littoral zones. It fields anti-ship ballistic and cruise missiles, fast-attack craft, naval mines, and drone platforms optimized for saturation tactics in confined maritime geography.
Statements by Supreme Leader Ali Khamenei regarding carrier vulnerability are part deterrent messaging, part doctrinal signaling. While the United States retains decisive maritime superiority, the relevant variable is not whether U.S. carriers can be destroyed in open confrontation; it is whether Iran can impose sufficient risk to complicate sustained operations, insurance markets, and global shipping confidence.
Even limited disruption in the Strait would generate outsized economic effects relative to the tactical event itself.
Munitions Sustainability
Precision munitions availability represents a critical constraint in any high-tempo campaign. Target sets in Iran would likely include:
Nuclear infrastructure,
Missile production and storage facilities,
Air defense nodes,
IRGC installations,
Command-and-control architecture,
Drone launch and storage sites.
Engaging such targets repeatedly across dispersed geography would require sustained expenditure of Tomahawk cruise missiles, Joint Direct Attack Munitions (JDAMs), and other precision-guided systems.
Open-source assessments by former U.S. officers suggest that high-intensity operations could deplete forward-deployed precision inventories within approximately one week if replenishment pipelines are not robust. Replenishment would depend on transoceanic logistics chains or afloat prepositioning vessels—assets that are themselves finite and potentially vulnerable.
The reported consideration of alternative logistics hubs outside the immediate Gulf region underscores how constrained basing access has become compared to earlier eras.
In Bayesian terms, awareness of munitions limits alters opponent expectations. If Iran believes U.S. operations are time-bound by logistics rather than political choice, its optimal strategy shifts toward endurance.
III.iii. The Afghan Parallel and the Escalation Dilemma
The conditions for an attritional trap are structurally present.
Iran is unlikely to surrender sovereignty or accept maximal external demands—particularly those extending beyond nuclear parameters to missile doctrine and regional influence—solely in response to aerial bombardment. Historical precedents from Bombing of Dresden to Operation Rolling Thunder suggest that sustained airpower against politically mobilized populations often consolidates rather than fractures national cohesion.
If the objective is a formal Iranian commitment never to develop a nuclear weapon under verifiable constraints, diplomatic pathways plausibly exist. If the objective expands to structural dismantlement of missile capabilities and regional networks, the coercive burden rises exponentially.
Should an initial strike fail to produce capitulation—the analytically higher-probability outcome—the United States would confront a narrowing set of options:
Escalate to large-scale ground operations — politically and militarily implausible under current domestic conditions.
Declare limited success and disengage — risking reputational erosion and adversarial emboldenment.
Sustain an open-ended attritional campaign — imposing financial costs, alliance strain, and operational depletion over time.
Each of these pathways carries greater long-term systemic cost than a negotiated settlement that falls short of maximal demands.
Strategic Parallel — Afghanistan and the Bayesian Signal
The August 2021 withdrawal from Kabul marked the conclusion of the War in Afghanistan. Beyond its immediate operational significance, it transmitted a Bayesian update to global observers: that the United States faced domestic political limits in sustaining prolonged coercive engagements.
An inconclusive or visibly strained campaign against Iran would transmit a qualitatively different signal. It would suggest not merely limits of political will, but observable operational ceilings of hard power against a mid-sized, regionally integrated state.
Adversaries—including China, Russia, and North Korea—would update their deterrence calculations accordingly. The inference would not be that the United States cannot project force, but that it cannot convert force into decisive political outcomes under contested, geographically expansive conditions.
From Beijing’s perspective, such an update would have implications for Taiwan contingency modeling. From Moscow’s perspective, it would reinforce narratives of Western overstretch. From Pyongyang’s perspective, it would validate endurance strategies.
This is the essence of the attrition trap: not battlefield defeat, but gradual erosion of perceived strategic effectiveness.
It is precisely this equilibrium—prolonged engagement without decisive resolution—that maximizes relative gains for revisionist powers while imposing asymmetric systemic costs on the U.S.-led order.
PART IV: SPECIAL CASE ANALYSIS II — THE THIRD-PARTY BENEFICIARY PROBLEM
IV.i. China’s Strategic Calculus
China’s official posture regarding the Iran crisis emphasizes restraint, opposition to “military adventurism,” and support for diplomatic resolution. Public statements from China consistently frame stability in the Middle East as essential to global economic continuity. This position is not insincere: Iran exports the overwhelming majority of its crude oil to China, making Iranian systemic collapse materially disruptive to Beijing’s energy security.
However, China’s strategic calculus operates on two parallel tracks.
On the first track, Beijing seeks uninterrupted hydrocarbon flows and avoidance of regional chaos that could spike prices or threaten maritime transit through the Strait of Hormuz.
On the second track, China benefits from sustained—though controlled—U.S. military absorption in the Persian Gulf. A United States heavily committed to air, naval, and logistical operations in the Middle East is a United States with reduced marginal capacity to surge in the South China Sea, the Taiwan Strait, or other Indo-Pacific theaters.
The optimal Chinese preference, therefore, is neither decisive American victory nor uncontrolled regional war. It is prolonged tension short of resolution—precisely the equilibrium that produces sustained U.S. force commitment without triggering systemic energy collapse.
Defensive Hardening Without Direct Entanglement
Reports since mid-2025 indicate that China has provided Iran with incremental modernization support, including:
YLC-8B UHF radar systems,
HQ-9B surface-to-air missile platforms,
Expanded access to BeiDou satellite navigation infrastructure,
Discussions reportedly involving advanced anti-ship cruise missile capabilities,
Expanded satellite-based situational awareness support.
A January 2026 airlift of PLA cargo aircraft to Iran, while limited in scale, functioned as both logistical activity and strategic signaling. In February 2026, a Chinese military attaché reportedly presented Iranian air commanders with a scale model of the J-20 stealth fighter—symbolic rather than transactional, but diplomatically suggestive.
The logic is structurally consistent: by incrementally increasing Iran’s defensive resilience without crossing the threshold into formal alliance or direct intervention, Beijing increases the expected duration and cost of any U.S. military campaign.
In Bayesian terms, China is attempting to shift Washington’s expected payoff downward in all coercive scenarios while preserving deniability.
The Rare-Earth Leverage Dimension
China also retains asymmetric economic leverage. It controls the vast majority of global refined rare-earth processing capacity—materials essential for advanced electronics, precision-guided munitions, and defense manufacturing supply chains.
Beijing has previously signaled willingness to impose export restrictions under geopolitical stress conditions. While such measures would carry economic costs for China as well, even the credible threat of export constraints introduces industrial uncertainty into U.S. defense planning.
This is not coercion in the classical sense. It is structural positioning. In a prolonged crisis environment, supply-chain fragility becomes a strategic variable.
Strategic Objective: Time as Weapon
The most important variable in China’s calculus is duration.
A short, decisive strike yields limited systemic benefit. A rapid diplomatic settlement preserves status quo equilibrium. A prolonged, resource-intensive campaign—particularly one that exposes munitions drawdown and operational friction—creates the most favorable informational and strategic environment for Beijing.
Under such conditions:
U.S. munitions stockpiles decline,
Intelligence on American tactics becomes observable,
Indo-Pacific force availability narrows,
Alliance debates intensify over energy vulnerability and strategic prioritization.
China does not need to win a war in the Gulf to benefit. It needs the United States to remain entangled there.
IV.ii. Russia’s Parallel Incentive Structure
Russia shares similar incentive alignment, though its capacity to shape events is more constrained by its ongoing commitments in Ukraine.
Russia cannot plausibly provide Iran with large-scale expeditionary defense. The January 2026 trilateral understanding among China, Russia, and Iran reportedly excluded a formal mutual defense clause—an indicator of Moscow’s desire to avoid automatic entanglement.
However, Russia can and does contribute in three key domains:
Intelligence cooperation, reportedly formalized under a 2025 comprehensive partnership framework.
Air defense reconstruction and technical contracts, including a December 2025 agreement reportedly valued at several hundred million dollars to restore and upgrade Iranian systems following the June 2025 strikes.
Diplomatic cover within institutions such as the United Nations Security Council, where Russia retains veto authority.
From Moscow’s perspective, the strategic objective is straightforward: the diversion of U.S. political capital, military resources, and alliance focus away from the European theater.
Every long-range cruise missile expended in the Persian Gulf is a missile not allocated to European contingencies. Every carrier strike group tied to Gulf operations is unavailable for deterrence in the North Atlantic. Every domestic debate within NATO over Middle East escalation strains cohesion relevant to Baltic and Eastern European security.
Russia’s gains are relative rather than absolute. It does not need Iran to prevail militarily; it needs the United States to expend attention and inventory.
Symbolic Signaling and Order Framing
The 2026 iteration of the “Maritime Security Belt” naval exercise in the Strait of Hormuz—conducted as U.S. carrier assets approached the region—served as coordinated signaling rather than preparation for joint combat.
Russian officials framed the exercise within a broader narrative of systemic competition between Western-led institutions and emerging multipolar alignments. This framing situates the Iran crisis not as a regional dispute but as a node within a global contest over institutional order.
From Moscow’s vantage point, prolonged U.S.–Iran confrontation reinforces the narrative of Western overstretch and accelerates perceptions of systemic transition.
IV.iii. The Munitions Exhaustion Problem as Strategic Externality
The munitions dimension represents perhaps the most underappreciated systemic risk.
Since 2022, the United States has expended precision-guided munitions at elevated rates in support of Ukraine while simultaneously replenishing inventories only gradually. Department of Defense reviews and industry reporting have identified long-range precision strike systems—such as advanced Tomahawk variants and air-launched cruise missiles—as production-constrained categories.
A sustained air-and-missile campaign against Iran would draw from the same inventory pools.
Industrial replenishment timelines for advanced munitions are measured in years due to component sourcing, microelectronics supply chains, and specialized production bottlenecks. Even accelerated funding cannot compress certain manufacturing processes beyond physical limits.
From China’s strategic perspective, this creates a dual informational and material dividend:
Operational Transparency — Real-time observation of U.S. performance against a capable integrated air defense network.
Inventory Depletion — Measurable reduction in available stocks for potential Indo-Pacific contingencies.
Beijing, in effect, receives insight into the systems it might one day confront—without expending its own assets.
Russia benefits similarly in the European context. NATO deterrence credibility is partially a function of ready munitions, not simply platform counts.
Strategic Implication for G7 Defense Ministers
A U.S.–Iran conflict extending beyond several weeks would not remain geographically contained in its strategic consequences.
It would affect:
NATO readiness levels,
Indo-Pacific deterrence calculations,
Defense industrial surge capacity,
Alliance cohesion over resource allocation,
Energy market volatility and fiscal resilience.
Munitions expended over Iranian territory cannot be reconstituted rapidly enough to hedge against simultaneous contingencies in the Baltic region or a Taiwan Strait crisis.
For G7 members with equities in both Euro-Atlantic and Indo-Pacific security architectures, the Iran crisis must be evaluated not as a peripheral Middle Eastern issue, but as a direct variable in their own defense planning assumptions.
The third-party beneficiary problem is therefore not abstract. It is structural: prolonged confrontation transfers relative advantage to actors who are not direct belligerents but who gain from duration, depletion, and distraction.
PART V: PROBABILITY-WEIGHTED SCENARIO ANALYSIS
V.i. Scenario A: Diplomatic Resolution (Prior Probability: 35%)
A diplomatic outcome remains plausible. The current negotiations have achieved more than public commentary suggests: “guiding principles” have reportedly been agreed; Iran is preparing a written draft proposal; Foreign Minister Abbas Araghchi has indicated that zero enrichment has not been formally demanded by the US side; and both Donald Trump and Masoud Pezeshkian have articulated interest in a deal.
The 35% prior probability reflects significant structural barriers:
Israeli opposition to any agreement short of full dismantlement of enrichment capacity
Congressional hardliners skeptical of sanctions relief
Trump’s domestic political framing of prior strikes as a signature achievement, which a negotiated rollback could appear to dilute
Iran’s insistence on retaining some enrichment rights under sovereignty claims
A Bayesian update toward higher probability would follow from:
A concrete Iranian written proposal receiving a positive US response at the upcoming Geneva round
Public endorsement by Trump of a “better than JCPOA” formulation
Israeli restraint during the critical diplomatic window
A deal in this scenario need not be comprehensive. A temporary freeze-for-relief arrangement—modeled loosely on the Joint Comprehensive Plan of Action—could significantly reset escalation dynamics without resolving the underlying strategic rivalry.
V.ii. Scenario B: Limited Strike / Coercive Success (Prior Probability: 20%)
This scenario posits a limited US airstrike—focused primarily on IRGC facilities and residual nuclear infrastructure—that successfully coerces Iranian concessions without triggering a sustained conflict.
The prior probability is assessed at 20% for four principal reasons:
Iranian leadership has publicly pledged retaliation to any strike, regardless of scale.
Chinese-supplied air defense systems reduce the probability of achieving rapid and decisive suppression of enemy air defenses (SEAD).
Israeli political dynamics favor maximalist objectives over limited punitive action.
Iranian domestic political constraints make overt submission to limited force politically untenable for regime leadership.
Conditions that would raise this scenario’s probability include:
A severe internal Iranian political crisis weakening regime cohesion
Clear evidence of Iranian deception sufficient to consolidate US domestic political support for military action
A first strike so operationally devastating that Iranian command-and-control collapses before retaliation can be organized
At present, none of these enabling conditions are clearly observable.
V.iii. Scenario C: Prolonged Attritional Campaign (Prior Probability: 30%)
This scenario—an extended US air-and-missile campaign that neither compels capitulation nor achieves war aims within a politically tolerable timeframe—represents the greatest strategic risk.
The 30% prior reflects the realistic possibility that:
The Geneva diplomatic track collapses
The United States initiates a major strike campaign
Iran absorbs punishment while retaliating asymmetrically
Potential Iranian responses could include:
Attempted disruption or partial closure of the Strait of Hormuz
Houthi missile attacks on Gulf energy infrastructure
Hezbollah activation in Lebanon
Cyber operations targeting regional and Western infrastructure
Proxy attacks on US facilities in Iraq and Syria
This scenario produces the payoff structure most favorable to China and Russia: sustained US munitions expenditure, alliance stress, energy volatility, and strategic distraction.
A Bayesian update toward higher probability would follow from:
Breakdown in Geneva negotiations
A Gulf incident (drone engagement, tanker seizure, naval collision) creating domestic political pressure for retaliation
Israeli unilateral action that forecloses diplomatic flexibility
Crucially, if a limited strike (Scenario B) fails to compel rapid Iranian compliance, the transition threshold into Scenario C rises sharply.
V.iv. Scenario D: Regional Escalation / Hormuz Closure (Prior Probability: 15%)
The most severe scenario involves an Iranian attempt to close the Strait of Hormuz—through which roughly 20% of globally traded oil transits—combined with retaliatory strikes on US naval assets, Gulf state infrastructure, and Israeli population centers.
Consequences would likely include:
Immediate global oil price shock (potentially exceeding $120 Brent)
Severe stress on G7 political cohesion
Direct engagement of Gulf monarchies’ survival interests
Saudi Arabia, Qatar, and the UAE—whose energy infrastructure would be primary targets—have already signaled reluctance to be drawn into overt war. A Hormuz closure scenario could fracture the regional security architecture long underwritten by US naval dominance.
The 15% prior probability reflects:
The regime-survival risk to Iran inherent in full escalation
The operational difficulty of sustaining closure against US Navy mine countermeasures and maritime interdiction
However, once kinetic operations begin, escalation dynamics can shift from deliberate strategic calculation to rapid action–reaction cycles. In that environment, this probability becomes highly sensitive to battlefield events, miscalculation, and third-party intervention.
Integrated Assessment
Aggregating these priors yields the following distribution:
Diplomatic resolution: 35%
Limited coercive strike: 20%
Prolonged attritional campaign: 30%
Regional escalation: 15%
The central analytic insight is not that war is inevitable—it is not. Rather, the modal risk lies in a mid-spectrum outcome (Scenario C) that produces the highest cumulative strategic cost to NATO readiness and Indo-Pacific deterrence.
For G7 defense ministers, the key question is therefore not whether escalation is desirable or avoidable. It is whether munitions stockpiles, industrial surge capacity, alliance political cohesion, and energy resilience are structured to withstand a conflict that may be strategically peripheral in origin but globally consequential in effect.
PART VI: POLICY RECOMMENDATIONS FOR G7 GOVERNMENTS
VI.i. Immediate Priorities (0–72 hours)
The Geneva talks on 27 February 2026 represent a genuine inflection point. G7 members with diplomatic relationships in Tehran—Germany, France, and the United Kingdom through the E3 format—should coordinate a unified message encouraging submission of a comprehensive written Iranian proposal, while privately signaling to Washington that allied political cover or logistical support for military action will not precede exhaustion of the diplomatic track.
The E3 format—France, Germany, and the United Kingdom—remains institutionally linked to the framework established under the Joint Comprehensive Plan of Action. That legacy structure provides both credibility in Tehran and leverage in Washington.
Simultaneously, G7 governments should initiate coordinated contingency planning for oil price volatility across all conflict scenarios. With Brent crude trading near $71 per barrel, even a limited exchange could trigger sharp price movements. Strategic petroleum reserve coordination mechanisms—particularly among the United States, Japan, and European partners—should be reviewed and prepared for conditional activation.
Financial regulators and central banks should also conduct stress simulations assessing:
Energy-import exposure
Insurance market shocks tied to Gulf shipping
Cyber resilience of energy infrastructure
Secondary sanctions spillover effects
The objective in the first 72 hours is not rhetorical positioning, but risk insulation.
VI.ii. Medium-Term Architecture (30–90 days)
If diplomacy succeeds, G7 governments should move rapidly to construct a “JCPOA-plus” verification architecture—retaining the core monitoring structure of the 2015 agreement while extending sunset clauses, enhancing inspection authorities, and tightening reporting timelines.
European governments retain the ability to activate the snapback mechanism embedded in the Joint Comprehensive Plan of Action before its October 2026 expiry. This provision restores prior UN sanctions automatically if invoked. Its power lies less in use than in credible threat. Properly sequenced, it provides structured leverage without foreclosing diplomacy.
Parallel to diplomatic architecture, G7 defense ministers should commission an urgent NATO-wide assessment of munitions sustainability under a scenario in which the United States conducts sustained air operations in the Persian Gulf exceeding two weeks.
This assessment should examine:
Long-range precision munitions stockpiles
Industrial surge timelines
Allied co-production capacity
Substitution effects (European systems offsetting US depletion)
Indo-Pacific deterrence implications
Findings should feed directly into burden-sharing discussions at the next NATO ministerial and into industrial policy coordination among G7 economies.
A prolonged Middle East campaign is not a regional event—it is a supply-chain event for alliance deterrence.
VI.iii. Strategic Framing for G7 Leaders
The Iran crisis should be framed accurately: it is a test of whether nuclear proliferation challenges can be managed through diplomacy within the existing international system.
Coercive denuclearization through airpower has no clear modern precedent of durable success. North Korea acquired and retained nuclear weapons despite prolonged US pressure, and military options were ultimately judged too escalatory. Iraq’s nuclear ambitions were addressed first through inspections and coercive diplomacy, then through war at enormous cost, without achieving the broader political transformation that intervention sought.
Iran differs structurally from isolated regimes. Its diplomatic corps is experienced; its strategic interests are intelligible; and its core demands—recognition of civilian enrichment rights under stringent verification, meaningful sanctions relief, and assurances against regime-change operations—are negotiable within a rules-based framework.
Game-theoretic analysis reinforces a practical diplomatic insight: when all parties face negative-sum losses from conflict and retain positive-sum gains from agreement, a negotiated equilibrium is rational. The binding constraint is not structural impossibility; it is domestic political feasibility—in Washington, in Tehran, and in Jerusalem.
For G7 leaders, the strategic communication task is therefore twofold:
Internally: prepare publics for calibrated compromise without framing it as capitulation.
Externally: reinforce that alliance credibility is strengthened—not weakened—when escalation is avoided through verifiable constraint.
The central policy insight is sober rather than idealistic: the objective is not trust. It is structured distrust, monitored and enforced, at lower strategic cost than war.
“China wants the US distracted. Russia wants the US depleted. Iran is their instrument.”
CONCLUSION
The United States and Iran stand at the edge of a conflict that neither population actively seeks, that disproportionately advances the strategic interests of adversarial great powers, and whose probable military trajectory falls short of its declared political objectives.
The Bayesian framework applied throughout this analysis does not yield comforting certainty. The combined probability of conflict scenarios still exceeds that of diplomatic resolution. However, it does generate a clear directional signal:
Each incremental advance in the diplomatic track shifts the probability distribution toward outcomes favorable to the Western alliance.
Each incremental normalization of military action in public discourse shifts that distribution toward outcomes structurally favorable to Beijing and Moscow.
The strategic asymmetry is stark. A prolonged US–Iran confrontation diverts American munitions, political capital, and alliance cohesion. That outcome aligns precisely with the incentives of both China and Russia.
For G7 leaders convened in 2026, the Iran crisis is not primarily about technical nuclear capability. Iran will retain the latent scientific and industrial capacity to develop a nuclear weapon under almost any agreement—just as technologically advanced non-nuclear states such as Japan, Germany, and South Korea retain breakout potential within non-proliferation constraints.
The central question is systemic:
Can negotiated non-proliferation architecture be restored after the erosion of 2018–2025?
Can the Western alliance maintain strategic coherence under simultaneous pressure from Israeli maximalist security doctrine, US domestic political polarization, and deliberate third-party disruption?
Can unity be preserved when adversarial powers have calculated—correctly in game-theoretic terms—that Western fragmentation yields them greater gains than any specific battlefield outcome?
This crisis is therefore less a regional flashpoint than a stress test of alliance strategy.
If diplomacy prevails, it will not be because trust has been restored. It will be because rational actors recognized that negative-sum escalation primarily benefits external competitors. If escalation dominates, it will not produce decisive transformation of Iran’s political system or permanent elimination of nuclear latency. It will instead validate the strategic thesis in Beijing and Moscow that the United States can be drawn into peripheral wars that erode its global position.
The choice facing G7 governments is therefore not between strength and weakness. It is between two competing conceptions of strength:
Strength as immediate coercive action, with uncertain strategic yield;
Strength as disciplined coalition management, industrial preparedness, and negotiated constraint under verification.
The distribution of probabilities is not fixed. It responds to political signals, alliance coordination, and diplomatic sequencing.
The ultimate strategic variable is not Iranian centrifuge counts.
It is Western unity.
