Case Study: The Current Crisis

Background and Triggers

The current wave of anti-government protests in Iran represents the most significant domestic challenge to the Islamic Republic since the 2022 demonstrations following Mahsa Amini’s death. The immediate catalyst was economic in nature, with Iran’s currency plummeting to record lows against the dollar, exacerbating already severe economic hardships faced by ordinary Iranians. Years of international sanctions, mismanagement, and corruption have created a tinderbox of public discontent.

Key Actors and Dynamics

Domestic Protesters: A broad coalition spanning different social classes and regions, united by economic grievances but increasingly articulating political demands for regime change. The protests have spread across major cities despite severe government crackdowns and internet blackouts lasting over 60 hours.

Iranian Government: Supreme Leader Ayatollah Ali Khamenei and the security apparatus have responded with characteristic severity. The attorney general’s warning that protesters could be charged as “enemies of God”—a capital offense—signals the regime’s willingness to use extreme violence to maintain control.

United States: President Trump has taken an aggressive stance, publicly threatening military intervention if the regime uses force against protesters. The administration has been briefed on fresh military strike options, including potential attacks on nonmilitary targets in Tehran, though no final decision has been made. Trump clarified that intervention wouldn’t necessarily mean “boots on the ground” but could involve strikes “where it hurts.”

Israel: While maintaining a high alert posture regarding potential US intervention, Israel hasn’t signaled a desire to intervene directly. Prime Minister Netanyahu and US Secretary of State Marco Rubio discussed the situation by phone, reflecting the close coordination between the allies. Israel’s primary concerns remain Iran’s nuclear and ballistic missile programs, which continue to pose an existential threat from Jerusalem’s perspective.

The June 2024 War Context

The 12-day war between Israel and Iran in June 2024, which saw US forces join Israeli airstrikes, demonstrated that direct military confrontation between these powers is no longer theoretical. This recent conflict provides a crucial backdrop for understanding current tensions and the heightened alert status in Israel.

Outlook: Potential Scenarios

Scenario 1: Internal Collapse or Reform (Low-Medium Probability)

The protests could intensify to the point where the regime either collapses or implements significant reforms. However, history suggests the Islamic Republic has robust mechanisms for survival, including the Revolutionary Guards and Basij militia forces. The regime has successfully suppressed previous protest movements through a combination of violence, propaganda, and tactical concessions.

Scenario 2: US Limited Military Intervention (Medium Probability)

Trump could authorize targeted strikes against Iranian military or infrastructure targets, framed as humanitarian intervention to protect protesters or as retaliation for violence against civilians. This would likely focus on command and control centers, Revolutionary Guard facilities, or symbolic targets in Tehran. Such action would almost certainly trigger Iranian retaliation against US interests in the region and potentially against Israel.

Scenario 3: Regional Escalation (Medium-High Risk)

Any US military action would likely provoke Iranian responses through proxy forces in Iraq, Syria, Yemen, and Lebanon. Iran could also attempt to close the Strait of Hormuz, through which roughly 21% of global petroleum passes, or launch missile attacks against Saudi or UAE infrastructure. Israel would be a prime target for Iranian retaliation, either directly or through Hezbollah in Lebanon.

Scenario 4: Status Quo with Continued Repression (High Probability Short-Term)

The most likely near-term outcome is that Iran successfully suppresses the protests through violence and internet blackouts, while the US limits its response to rhetoric, sanctions, and covert support for protesters. This scenario maintains the current unstable equilibrium but leaves underlying tensions unresolved.

Proposed Solutions

Diplomatic Track

International Mediation: Countries with relationships with both Washington and Tehran, such as Oman, Qatar, or potentially China, could facilitate backchannel communications to de-escalate tensions. The goal would be to find face-saving exits for both sides while addressing legitimate grievances.

Multilateral Pressure: Rather than unilateral US action, coordinating with European allies, Arab states, and international organizations could apply broader pressure on Iran to show restraint while maintaining diplomatic channels. The UN Security Council could play a role, though Russian and Chinese vetoes would likely limit any binding resolutions.

Conditional Sanctions Relief: Offering phased sanctions relief in exchange for verifiable commitments on human rights, nuclear program limitations, and regional de-escalation could provide economic relief to ordinary Iranians while creating incentives for regime moderation.

Regional Security Architecture

Gulf Security Framework: Establishing a more robust security framework involving Gulf Cooperation Council states, the US, and potentially including Israel in backchannel coordination could deter Iranian aggression while providing reassurance to regional allies.

Naval Coalition: Strengthening the maritime security presence in the Strait of Hormuz and surrounding waters to deter Iranian threats to energy supplies and ensure freedom of navigation.

De-escalation Protocols: Developing agreed-upon protocols for crisis communication and de-escalation between the US, Israel, and Iran to prevent miscalculation and accidental escalation.

Support for Iranian Civil Society

Information Access: Supporting efforts to circumvent Iranian internet censorship through satellite internet services, VPNs, and other technologies that allow protesters to communicate and document regime abuses.

Targeted Sanctions: Imposing sanctions specifically on Iranian officials and Revolutionary Guard commanders responsible for human rights abuses, while avoiding broad economic sanctions that primarily harm ordinary citizens.

International Accountability: Documenting human rights violations for potential future prosecution through international tribunals or universal jurisdiction cases.

Singapore Impact Assessment

Economic Implications

Energy Markets: Singapore, as a major oil refining and trading hub, would face significant impacts from any disruption to Persian Gulf oil flows. While Singapore doesn’t import large quantities of crude directly from Iran, regional instability affecting the Strait of Hormuz would spike global oil prices, affecting Singapore’s refining margins and increasing costs for consumers and businesses.

Trade Routes: Approximately 40% of Singapore’s maritime trade passes through or near the Middle East. Sustained conflict could disrupt shipping routes, increase insurance costs, and force rerouting of vessels, impacting Singapore’s position as a global shipping hub.

Financial Markets: Singapore’s status as a regional financial center means that Middle East instability would likely trigger volatility in local markets. Flight-to-safety flows could benefit Singapore’s banking sector, but overall regional uncertainty would dampen investment and economic activity.

Strategic and Security Dimensions

Defense Relations: Singapore maintains defense relationships with both the US and various Middle Eastern states. A US military intervention in Iran could complicate these relationships and require careful diplomatic navigation. Singapore would likely face pressure to take positions or provide support, which it would typically resist in favor of neutrality.

Terrorism Risk: Regional instability and potential radicalization could increase terrorism risks in Southeast Asia. Iranian-backed groups or sympathizers might target US or Israeli interests in the region, potentially affecting Singapore given its Western-aligned posture and significant American presence.

Cybersecurity Threats: Iran has demonstrated sophisticated cyber capabilities. In a scenario of escalating conflict, Iranian state-sponsored hackers might target critical infrastructure in US-allied nations. Singapore’s smart nation initiatives and extensive digitalization make cybersecurity particularly important.

Policy Considerations for Singapore

Diplomatic Neutrality: Singapore would likely maintain its traditional stance of non-interference in other nations’ internal affairs while calling for peaceful resolution and respect for international law. This balanced approach protects Singapore’s relationships across different camps.

Energy Security: Accelerating diversification of energy sources and routes becomes more urgent. Singapore’s investments in renewable energy, liquefied natural gas imports from diverse sources, and strategic petroleum reserves would all be important buffers.

Business Continuity Planning: Singapore businesses with Middle East exposure should develop robust contingency plans for supply chain disruptions, evacuation of personnel, and alternative sourcing arrangements.

Regional Cooperation: Working through ASEAN and other regional forums to maintain stability in Southeast Asia and prevent spillover effects from Middle Eastern instability.

Opportunities Amid Crisis

Safe Haven Status: Singapore’s political stability, rule of law, and strategic location could attract capital and businesses seeking to relocate from unstable regions, potentially boosting property markets and financial services.

Mediation Role: Singapore has historically played constructive roles in facilitating dialogue between conflicting parties. Its trusted neutral status could make it a venue for backchannel communications or eventual negotiations.

Technology and Services: Demand for Singapore’s expertise in areas like cybersecurity, port operations, and crisis management could increase as regional actors seek to bolster their resilience.

Conclusion

The current crisis in Iran represents a dangerous convergence of domestic instability, regional rivalry, and great power politics. While the most likely near-term outcome is regime survival through repression, the risks of escalation remain significant. For Singapore, the priority must be maintaining strategic flexibility, enhancing resilience across economic and security domains, and positioning itself as a constructive voice for stability and dialogue. The coming weeks will be critical in determining whether this crisis leads to transformative change in Iran, devastating regional conflict, or another chapter in the long-running standoff between Tehran and its adversaries.