July 18, 2025 Israel-Iran-Syria: 3 Scenarios of What Comes Next

Companies with interests in the Middle East should use the current pause to assess the implications of three potential short-term outcomes of the conflict.

By Lara Tandy and Tamsin Hunt

A few weeks after U.S. President Donald Trump announced a ceasefire between Israel and Iran, the situation remains fragile. The truce, which officially took effect on June 24 at 7:00 am Israeli time, was met by ongoing missile exchanges. Beginning at 5:15 am, Iran launched strikes on Tel Aviv and southern Israel, which continued at 7:06 and 10:25 am and caused significant property damage and civilian casualties. In response, Israel destroyed a radar installation near Tehran later in the day. Since then, however, hostilities appear to have halted, at least temporarily, under diplomatic pressure from Washington.

While the missiles may have quieted for now between Israel and Iran, the underlying drivers of conflict remain firmly in place and regional tensions continue to play out, as seen in Israel’s recent July airstrikes in Syria on Damascus and Suweida following days of sectarian fighting between Bedouin tribes and Druze militias. For global industries, particularly those with operations in the Middle East or supply chains that run through it, this fragile pause presents a crucial opportunity to reevaluate geopolitical risks and assess how the situation might evolve over the coming months.

Despite public commitments from both sides to uphold the ceasefire, the agreement rests on unstable ground. Domestic pressures in Israel and Iran, the recent damage inflicted on both countries’ infrastructure, and broader regional power dynamics all point to uncertainty. Still, there are strong incentives, political, strategic, and economic, for all parties to avoid further escalation in the near term.

The June conflict marked a notable escalation in Iran’s long-simmering hostilities with Israel. While the Islamic Republic’s attacks on June 24 were destructive, they appear to have been designed primarily as a deterrent rather than a signal of intent to launch a broader war. With its military capabilities degraded, its nuclear infrastructure disrupted, and its domestic stability under pressure, Iran’s regime is likely to see the ceasefire as a chance to regroup. This pause gives Iranian leadership breathing room to reassess its intelligence capabilities, reconsider its nuclear strategy, and restore internal order without the added pressure of an active external conflict.

The United States continues to play a pivotal role in shaping the contours of the conflict. The Trump administration, while straying from its broader policy of disengagement from overseas military campaigns, opted for a tightly controlled intervention that would appear to have been designed as a once-off strike and that had minimal casualties. With Iran’s nuclear capabilities temporarily diminished and U.S. forces largely uninvolved in active combat, the Trump White House is positioning the ceasefire as a strategic success, one that supports Israel while avoiding a drawn-out regional war.  

Israel, meanwhile, declared that by June 24, its primary military goals – neutralizing imminent Iranian threats – had been achieved. Accepting the ceasefire allows the Israeli Defense Forces time to replenish critical munitions, particularly its stocks of interceptor missiles that have reportedly run low after the recent attacks. It also ends widespread and persistent disruptions to daily life and the economy. Politically, aligning with President Trump’s diplomatic efforts helps reinforce U.S.-Israel ties, ensuring continued military and economic support. However, there remains the possibility that Israel, led by Prime Minister Benjamin Netanyahu, may resume hostilities as a response to domestic political pressures.

Looking ahead, there are three plausible paths the conflict could take over the next six to twelve months, each with implications for regional stability and global business operations.

The high likelihood scenario is that the ceasefire largely holds but is intermittently disrupted by low-level confrontations. In this scenario, Israel and Iran continue to engage in limited airstrikes, cyber operations, and proxy activities, similar to the current Israel-Hezbollah dynamic. Both sides are likely to calibrate their actions to avoid uncontrolled escalation, while still pursuing strategic objectives. For the private sector, this would mean ongoing volatility, with periodic threats to maritime shipping, air travel, and digital infrastructure. Such disruptions may not be sustained or catastrophic, but they will be unpredictable and difficult to manage for industries dependent on regional stability.

A second scenario, which has a moderate likelihood, involves the complete breakdown of the ceasefire and a return to full-scale war. Potentially triggered by substantial Israeli and US concerns about the direction of Iran’s nuclear and ballistic missile program or a domestic political crisis in Israel, this scenario could see Israel launching extensive strikes across Iran, targeting not only military assets but also political and economic infrastructure. Iran could likely retaliate with missile attacks on Israeli cities, potentially drawing the U.S. into the conflict more deeply. American involvement could escalate to strikes on Iranian government facilities, energy networks, and military installations. In this event, Iran might respond by targeting U.S. bases across the Gulf or attempting to obstruct shipping in the Strait of Hormuz. The economic impact would be global, with severe energy price shocks, trade disruptions, and supply chain breakdowns affecting everything from manufacturing to logistics.

The least likely scenario would be a significant regional de-escalation, potentially underpinned by a new international nuclear agreement. In this scenario, Iran would agree to halt its pursuit of weapons-grade nuclear material in exchange for sanctions relief and security guarantees. While deep ideological divisions and regional rivalries would remain, the overt threat of military conflict would recede. Achieving this would require firm and sustained diplomacy, particularly from the U.S., which would need to pressure both Iran and Israel to prioritize long-term stability over short-term tactical victories. If successful, this could create space for renewed economic engagement, greater regional cooperation, and a reduction in security-related business risks.

For now, industry leaders must navigate an uneasy calm. The current ceasefire offers no guarantee of long-term peace. Rather, it represents a strategic pause in a volatile conflict that could flare up again with little warning. Companies with interests in the region should use this time to assess vulnerabilities, review contingency plans, and remain alert to shifts in diplomatic and military dynamics.

About the Authors
London-based Lara Tandy is an Associate Director and heads MENA (Middle East and North Africa), Corporate Intelligence at global intelligence and cybersecurity firm S-RM. Tamsin Hunt is an Analyst in S-RM’s Strategic Intelligence practice, with recent focus on Sri Lanka, Turkey and Tunisia.

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