Global Affairs Session 83 24 August 2026

IRAN'S LONG GAME

What the future holds for the global economy now

Iran’s long game in August 2026 is not simply to survive US-Israeli pressure. It is to convert survival into bargaining power by using military endurance, the Strait of Hormuz, Eurasian connectivity and strategic relationships to shape the terms of an eventual settlement.

Iran digs in Economic war Defence structure Importance of Iran Iran–Russia–China axis War lessons IRGC rumours Iran’s long game

Iran digs in, America steps up

Iran’s long game in August 2026 is not simply to survive US-Israeli pressure. It is to convert survival into bargaining power.

After six months of war, Iran lost leaders, infrastructure and capacity, yet the regime has endured, become hardline, its missile forces remain relevant, and the Strait of Hormuz has become its key lever.

The new leadership around Supreme Leader Mojtaba Khamenei and an empowered IRGC is more militarised and risk-tolerant. Iran is now trying to outlast Washington, protect ties with China and Russia, anchor itself in Eurasian corridors, and force eventual settlement to include sanctions relief, reconstruction and regional recognition.

US launches an all-out economic war on Iran

1. America has now launched an “economic D-Day” against Iran, including maximum sanctions on anyone trading with it.
2. US focus is: oil exports, shipping, banks and third-country buyers. Goal is to kill Iran’s entire economic ecosystem. (i.e. China)
3. China is the critical target because it buys most Iranian crude.
4. Iran has already faced major US sanctions since the 1990s. That led to the Obama-era 2015 JCPOA deal, which Trump scrapped in 2018.
5. Sanctions weakened Iran but never produced strategic surrender.
6. Iran’s answer: We won’t surrender. We’ll now make it costly for the entire global economy.

What is the defence structure of Islamic Republic of Iran actually

1. Iran has several parallel armed and security institutions, not just one military. The primary ones are Artesh (main Army), IRGC (protectors of Revolution), Basij Resistance Force (under IRGC), and Quds Force (IRGC).
2. Supreme Leader is at the top, and these operate under the system.
3. Artesh is the regular armed forces - Army | Navy | Air Force | Air Defence.
4. IRGC are the Revolutionary Guards - Ground Forces | Aerospace/Missiles | Navy | Quds Force | Basij
5. Alongside them are - Police / Law Enforcement Command, MOIS intelligence, IRGC Intelligence, and MODAFL defence industry/logistics.
6. Artesh protects Iran as a country. IRGC protects Iran as an Islamic revolutionary regime. Basij provides the IRGC with mass domestic mobilisation and internal-security capacity.

The importance of Iran

1. Iran’s biggest strength is geography, as it links the Gulf, Caucasus, Central Asia and Indian Ocean. It wants to transform from a sanctioned energy exporter into a transit state connecting different parts of Eurasia.
2. So roads, ports, railways, shipping corridors become instruments of geopolitical power, making Iran indispensable. American knows this.
3. The International North-South Transport Corridor (INSTC) is central to this strategy, as it connects India–Iran–Russia. The Rasht–Astara rail strengthens Iran’s Eurasian role.
4. Chabahar keeps India connected to Iran and Central Asia, without needing Pakistan. But American sanctions stopped the progress.
5. Rail links connect Iran through Turkmenistan and Kazakhstan into the Central Asian system. Iran sees itself not only as a north-south bridge between Russia and the Indian Ocean, but as part of emerging east-west Eurasian trade.
6. South Caucasus is a major geopolitical contest, and Iran is deeply suspicious of the US-backed Trump Route for International Peace and Prosperity, or TRIPP, through southern Armenia connecting Azerbaijan with Nakhchivan and Turkey.
7. Tehran opposes corridors that strategically bypass Iran. Goal: become an indispensable transit state.

Iran Russia China axis

1. The three nations are partners but not a NATO-style alliance, and their relationship is frequently exaggerated.
2. Russia and Iran signed a comprehensive strategic partnership, but the agreement deliberately contained no mutual-defence commitment. Neither Moscow nor Beijing have entered the 2026 conflict militarily. Iran knows its two partners will not necessarily fight America for Iran.
3. Russia has strong reasons to prevent Iran from collapsing, as they cooperate on military technology, energy, sanctions evasion and Eurasian connectivity. Russia sends military supplies to Iran through the Caspian Sea (ammunition and components). Ukrained attacked those lines.
4. The INSTC gives Russia a commercially important route south towards the Indian Ocean, so it benefits from an Iran that is strong enough to obstruct Western strategy.
5. China is economically much more important to Iran, as it's the main buyer keeping Iran’s oil economy. Iranian crude moving to China is traded through intermediaries and settled outside conventional Western financial channels. Hence Trump will attack China in his August 2026 sanctions strategy. If China folds, it's advantage Trump. If not, Trump loses.
6. China has its own Gulf interests, as it imports huge quantities of energy from Saudi Arabia, the UAE, Qatar and others, and a destabilized Gulf is undesirable. Iran cannot assume that “enemy of my enemy” means unconditional Chinese support. China's priority is Chinese stability.
7. Iran’s objective is strategic diversification, not dependence. It wants - Russia for military and northern connectivity; China for oil demand, investment and financial breathing space; India for Chabahar and access toward the Indian Ocean; Central Asia and the Caucasus for transit; and Iraq, Turkey, Oman and Pakistan for regional commerce.
8. Iran is betting on a more multipolar international system, via membership in BRICS and the SCO, etc. Iran believes American financial power is strongest when Washington can isolate a country universally. So moving trade outside American structures is key.

Lessons from the 2026 war

1. Decapitation strikes can destroy leaders without destroying the state. Iran taught US and Israel that killing commanders is not identical to collapsing institutions.
2. Regime change proved much harder than military decapitation did, and a new more hardline leadership dominated by the IRGC took charge. Mojtaba Khamenei became Supreme Leader, while IRGC veterans occupied the decisive military-security positions.
3. Iran learned that missiles and asymmetric warfare still provide deterrence, as its conventional infrastructure took enormous punishment. Iran retained significant missile capability despite months of strikes. So goal now will be survivable missile forces, drones, dispersed launchers, hardened facilities and asymmetric maritime warfare.
4. Iran discovered that Hormuz may provide more immediate leverage than the nuclear programme! This is the most consequential strategic lesson of the entire war. It is now Iran’s new “golden weapon”.
5. The US discovered the cost of prolonged precision warfare, as the US Army consumed much of its stock of long-range precision weapons including “virtually all” available ATACMS and Precision Strike Missile stocks. So prolonged high-intensity warfare has opportunity costs. Iran is practising endurance.
6. Mojtaba Khamenei has ordered a planned integration of the Armed Forces General Staff with the Khatam al-Anbiya Central Headquarters (to end the command failures exposed by US-Israeli decapitation strikes).
7. Iran’s lessons are: fewer vulnerable command layers, faster wartime decisions, stronger IRGC influence and greater capacity to keep operating after leadership losses.

US bribes to fracture the IRGC? Rumours abound!

1. Ahma Vahidi: reportedly offered $1bn+ / “billions” – unverified ☺
2. Senior IRGC commanders: alleged collective multi-billion-dollar inducements; names unknown.
3. Allegedly included cash + political protection + survival guarantees.
4. Allegedly included possible future economic rewards after regime change.
5. Verified part: Trump administration established a secret Vahidi backchannel via Tulsi Gabbard → Nechirvan Barzani. The bribery component remains unverified. All efforts failed.

Iran’s Long Game

1. Iran wants negotiation but not from apparent defeat. They want sanctions relief, release of frozen funds, removal of the maritime blockade and recognition of Iranian security demands. This is coercive diplomacy: create enough military and economic cost to improve the terms available at the negotiating table.
2. The Gulf states will accelerate strategic hedging, as neither confrontation with Iran nor complete dependence on Washington guarantees security now. The fact that Saudi Arabia, Turkey and Pakistan signed the Mecca Joint Defence Agreement on August 7, proves it.
3. Gulf governments will simultaneously seek four things: American protection, Chinese economic engagement, regional defence cooperation and channels to Tehran. The likely future is not two clean blocs, but multi-alignment.
4. Gulf energy producers will try to reduce Iran’s Hormuz leverage, and so Saudi Arabia, the UAE and international partners will expand pipelines, Red Sea access, overland logistics, storage capacity and alternative export arrangements.
5. Eurasia is important to Iran as Western access becomes harder, so it will accelerate the INSTC, Caspian shipping, rail links toward Central Asia, trade with Russia and China, and connections through Pakistan, Iraq and Turkey. This is the "sanctions strategy". Iran’s long game therefore increasingly runs north and east as well as west toward the Gulf.
6. But Europe faces an uncomfortable middle position, as it opposes Iranian nuclear proliferation and restrictions on freedom of navigation. The EU has designated the IRGC as a terrorist organisation under its counter-terrorism sanctions regime, but is has reasons to prevent permanent Gulf instability.
7. America’s goal: "economic collapse will force Iran to surrender strategically or destabilise the regime." Iran’s goal: "we can survive longer than US can sustain the military, economic, political and global costs of forcing that collapse." That is Iran’s long game in 2026.

Value addition

Glossary and related terms

Coercive diplomacy

The use of threats, limited force or economic pressure to persuade another actor to accept a negotiated outcome.

Strategic endurance

The capacity to continue absorbing military, economic and political costs longer than an opponent expects or can sustain.

IRGC

Islamic Revolutionary Guard Corps, a parallel military and security institution created to defend Iran’s revolutionary political system.

Artesh

Iran’s regular armed forces, including its army, navy, air force and air-defence branches.

Basij

A mass mobilisation and internal-security force operating under the IRGC.

Quds Force

The IRGC branch associated with external operations, regional networks and support for partner organisations beyond Iran.

MOIS

Iran’s Ministry of Intelligence and Security, one of the principal institutions in the country’s intelligence system.

MODAFL

Iran’s Ministry of Defence and Armed Forces Logistics, responsible for defence administration, industry and logistical support.

Maximum pressure

A strategy of broad economic and diplomatic restrictions intended to reduce an opponent’s resources and bargaining freedom.

JCPOA

The 2015 nuclear agreement between Iran and major powers that linked limits and verification measures to sanctions relief.

Strait of Hormuz

A narrow maritime passage connecting the Persian Gulf with the Gulf of Oman and a critical route for global energy shipments.

Transit state

A country that derives strategic and economic influence from carrying trade, energy or transport routes across its territory.

INSTC

International North-South Transport Corridor, a multimodal network connecting India, Iran, the Caucasus, Central Asia and Russia.

Chabahar

An Iranian port on the Gulf of Oman used in plans to connect India with Afghanistan, Central Asia and wider Eurasian routes.

Strategic diversification

Building relationships with several partners so that national strategy does not depend excessively on a single power or route.

Decapitation strike

An attack aimed at removing senior political or military leadership in order to disrupt command and decision-making.

Asymmetric warfare

The use of missiles, drones, proxies, maritime disruption or other methods to offset an opponent’s conventional military superiority.

Strategic hedging

Maintaining security and economic relationships with competing powers while avoiding exclusive alignment with any one of them.

Multi-alignment

A foreign-policy approach in which a state works with different powers on different issues without joining a single rigid bloc.

Value addition

Conceptual references

• Economic sanctions, maximum-pressure strategies and the historical relationship between pressure and negotiated nuclear agreements.
• Iran’s parallel military-security institutions, including the Artesh, IRGC, Basij and Quds Force.
• Eurasian connectivity through the International North-South Transport Corridor, Chabahar, Caspian shipping and Central Asian rail links.
• Strategic partnerships, multipolarity, BRICS, the Shanghai Cooperation Organisation and sanctions-resistant trade channels.
• Deterrence through missiles, asymmetric warfare, maritime disruption and leverage over the Strait of Hormuz.
• Command resilience, decapitation strikes, strategic endurance and the institutional survival of states under military pressure.
• Coercive diplomacy, strategic hedging, multi-alignment and regional efforts to diversify security and energy routes.