Faultlines: The wider security implications of the Iran conflict

As the US and Iran navigate a temporary ceasefire established in early April, and prospects for further negotiations, the underlying drivers of the conflict remain largely unaddressed, and the path to peace could prove rocky. The conflict has already demonstrated Iran’s ability to make any military campaign against it politically and economically costly – a course of action which could resume should negotiations falter. But, Iran may also be motivated to lean more heavily on avenues to indirectly pressure the US, Israel and their allies in efforts to avoid violating key terms and conditions for ceasefires or negotiations – like direct strikes or shutting the Strait of Hormuz – which may prompt further US and Israeli military retaliation. Meanwhile, amid persistent tensions, distrust and the potential for sporadic strikes and miscalculated responses, wider regional instability will likely remain a challenge.

Regional faultlines and proxy conflicts

A major concern among regional authorities and commercial shipping operators has centred on the potential for Iran-aligned proxy to further destabilise the wider security environment in support of their backer.

On Israel’s northern border, the Lebanon-based political and militant group, Hezbollah, fired missiles into Israel as the conflict began, and there are indications that the group’s strikes have been coordinated with Iran to test and strain Israeli air defences. Israel has taken the opportunity to further its own strategic objectives, launching what it anticipates will be a “prolonged” air campaign and ground operations inside Lebanon to target Hezbollah and its capabilities, with officials indicating the campaign will continue beyond any cessation of the wider conflict with Iran. This has included airstrikes in Beirut, and mass internal displacement in the south, alongside over 1,000 deaths. These developments have worsened the humanitarian situation and compounded damage to infrastructure that the government had struggled to address even before the latest hostilities began.

Further south, the Houthis remain a wildcard. While their initial reaction was limited to threats claiming that they would “pull the trigger,” the group entered the fray in late-March, launching missile salvos against Israel. While Houthis also have significant capabilities to target commercial traffic in the Red Sea and the Bab Al Mandab Strait, they are likely cautious about targeting maritime activity; such a move risks a more substantial retaliation from countries who maintain active naval forces and shipping interests in the area, and could draw Houthis into a costly conflict that will further strain its degraded capabilities from previous US and Israeli airstrikes. Nevertheless, the option remains on the table, and could see the emergence of a second maritime chokepoint alongside the Strait of Hormuz if talks with Washington collapse, or tensions spike again.

Threats abroad

Iran has signalled that any support for its adversaries could carry domestic risks in countries beyond the Middle East. While successful direct strikes in the US and Europe are unlikely, the potential for asymmetric operations such as cyberattacks will remain elevated among government authorities, technology and data firms, financial institutions and other critical commercial operators abroad, as long as tensions simmer in the Middle East. Iran linked actors have previously targeted Western government agencies and companies, particularly in the US, in retaliation for the US’s perceived role in regional conflicts, and a recent attack by the Iranian linked Handala group – which breached a US medical company and wiped data from more than 200,000 servers and devices in March 2026 – underscores the elevated threat environment.

Iran also has a track record of using intermediaries to recruit criminal groups in Western countries to carry out low level sabotage, arson operations, and shootings. Security services in Europe and North America have increasingly suspected Iranian involvement in a spike of incidents targeting Jewish institutions and US diplomatic missions. Law enforcement and counterterrorism agencies have also warned of heightened extremist threats driven by self-radicalised lone actors sympathetic to Iran – which could endure even after direct hostilities end, especially if aggrieved individuals or groups reject an agreement between the US and Iran or harbour longer-term sentiment against opposing governments.

Looking ahead

While Iranian authorities indicated that the April ceasefire is largely “in line” with the regime’s desires, it will likely draw on a range of tools at its disposal to impose pressure and costs on its adversaries if negotiations collapse, or fail to produce meaningful dialogue and concessions around issues like uranium enrichment. Derailed negotiations could contribute to sustained risks wherever Iran is able to leverage regime proxies to disrupt maritime trade, economic activity, civilian life or opponents’ military capabilities.

Iran’s regional allies, like the Houthis, could still act autonomously should they reject an agreement, driving longer-term potential for destabilisation in certain areas like the Red Sea. Meanwhile, the indirect consequences of the conflict, including renewed instability in Lebanon and a growing threat of extremist violence in western countries, suggests that the broader fallout of the war could linger even in the event of a deescalation or peace agreement.