Iran’s New Playbook: The Next Steps on the Escalation Ladder

Iran’s deterrence strategy—once the terror of the region, propped up by powerful proxies such as Hezbollah and the Houthis as well as smaller and less capable militias—is now hobbling, visibly depleted from its engagements in the post-October 7 period. Iran’s army of foreign agents was created to influence events across the Middle East, and if necessary to keep Israel and Tehran’s other adversaries focused on their near abroad, allowing Iran to remain out of direct conflict. 

But the facts on the ground have changed substantially over the past year—and particularly since Iran’s unsuccessful missile attack against Israel on April 13. Iran’s strategy of low-cost, low-risk proxy war was meant to keep its adversaries at the mercy of perpetual surprise. But as any military planner knows, a static strategy is a doomed strategy. Indeed, Israel’s technological advantage has made it evident that Iran’s strategy, once effective, can barely keep up. Tel Aviv’s ability to conduct pinpoint airstrikes and cyber attacks, as well as its possession of cutting-edge missile defense systems, has exposed the shortcomings of Iran’s playbook when tested in real-world conditions. Tehran now faces an no-win choice: adjust to the game’s new rules, or accept defeat.

Unraveling Iran’s Traditional Deterrence Model

Iran’s strategy of uniting, arming, and directing militias across the Middle East from Lebanon to Yemen was once regarded as a stroke of genius: it allowed Iran to wreak havoc on its enemies without risking Iranian lives and provoking the anger of its own population. But today, the picture looks very different. Precision airstrikes, improved missile defenses, and cyberattacks have drained these militias of their operational effectiveness. In Lebanon, Hezbollah spent years amassing an arsenal of hundreds of thousands of missiles, effectively establishing mutually-assured destruction with Israel—but was powerless to stop the wave of Israeli missiles and airstrikes  that have decimated its command and control. In less than two weeks, Israel killed longtime Hezbollah leader Hassan Nasrallah, then his successor—along with nearly everyone else in the group’s high command, leaving it flailing and unresponsive to Israel’s incursion into Lebanon. 

In Yemen, the Houthis, beyond creating headlines with their missiles and drone attacks, have not shifted the military balance on the ground. Elsewhere in the region, Iran’s proxies are faltering under the relentless pressure of Israel and the United States, unable to deliver the punch that Tehran needs to stay afloat. And their impotence is being broadcast to a global audience, emasculating Iran in the eyes of the world.

While Israel’s military operations have resulted in a strategic setback for both Hezbollah and Iran, Tel Aviv has also come under significant criticism for the terrible human cost it has imposed upon the Palestinian people, especially in Gaza—and now in Lebanon as well. While its high-tech weapons have proven effective at eliminating Hamas and Hezbollah foot soldiers and commanders, the consequences of this Israeli success are far from strategic. “Precision” strikes often cause collateral damage, and the devastation left behind has triggered international outrage and further inflamed tensions in Gaza and beyond.

The IDF’s approach—“shock and awe”-style airstrikes backed by near-total control over the skies—diminishes the threat of retaliation against Israel’s armed forces. But the Israeli campaign will also produce more cycles of violence, undermining the long-term stability of the region. This is not a recipe for peace; instead, it is a path that leads to endless conflict and the deepening of mutual hatred.

Tehran’s New Playbook

Now that its proxy-based deterrence is near collapse, Iran has little choice but to develop a new playbook if it wants to remain a credible regional power. Below are some potential courses of action Tehran could pursue to regain the initiative and re-establish itself as a regional heavyweight. 

First, Iran is likely to devote serious consideration to the development of a nuclear weapon. Until the last month, observers regarded Hezbollah as Iran’s ‘trump card’ over Israel, with its ability to incinerate the country’s north a significant deterrent. With Hezbollah’s abrupt collapse, Tehran will need a new way to guarantee its own safety from external threats. Indeed, a nuclear-armed Iran would not just shift the regional balance of power; it would reverse the order altogether. The costs of any military action against Tehran would skyrocket, causing even the most hawkish opponents to think twice—or develop atomic weapons of their own, leading to a dangerous arms race. 

Second, with its military technology falling further behind in the arms race, Iran is likely to make significant investments in asymmetric warfare, doubling down on drones, offensive cyber capabilities, and precision-guided munitions. Through its partnership with Russia and burgeoning relationship with North Korea, Tehran could gain access to helpful technologies that would allow it to evade the Iron Dome and strike Israel, thereby re-establishing some measure of deterrence.

Third, Iran has proven creative and cunning in its approach to hybrid warfare: it utilizes electronic warfare, cyber attacks, loitering munitions, and technologies that can bypass Israel’s conventional systems of deterrence and defense, allowing Iran to inflict costs without having to commit to major war. This guerrilla mindset could allow Tehran to succeed where simple conventional warfare has clearly failed.

Finally, Iran will probably continue to invest in its foreign partnerships. As Saudi Arabia and Israel eye a ‘grand bargain’ establishing a broad anti-Iran alliance under the leadership of the United States, Tehran sees a clear strategic imperative in improving its ties to Russia, its main foreign backer. Russia’s international isolation in the wake of its invasion of Ukraine has allowed it to deepen bilateral ties to Iran without fear of further Western actions. Iran is also likely to strengthen its ties to North Korea, which faces similar constraints and has more experience weathering international isolation.

No Good Options

Whichever route Iran takes, the Islamic Republic could send shockwaves across the Middle East. Israel and the United States—not to mention others in the region—are unlikely to sit still as Tehran cultivates new military capabilities, and especially if it develops a nuclear capability. If these events occur, tensions will mount, economic sanctions will be levied, and the Western nations might even launch preemptive strikes that neuter Iran’s ability to develop its conventional or nuclear forces. Asymmetric and unconventional warfare do not add stability, but even greater unpredictability. In a region where miscalculation can easily lead to catastrophe, none of Iran’s potential courses of action are a clear recipe for success.

Yet, it is clear that Iran’s old playbook is circling the drain. As evidenced by the current conflict, the ability to conduct proxy warfare does not guarantee deterrence; an age of technological competitiveness and accelerated change has taken place. The more Tehran seeks to adapt, the more turbulent the region’s newest phase of war will become, with higher stakes and fewer off-ramps. Ultimately, deterrence in the Middle East will be determined as much by adaptability and ingenuity as by brute force, as Iran and its many adversaries try to anticipate developments on the battlefield. Such anticipation is more than an academic exercise: it is a matter of urgent strategic consequence for any country aspiring to survive and prosper in an increasingly bleak security environment.