Tipping the scales: Iran in the SCO

In September 2022, Iran signed the memorandum to become a permanent member of the Shanghai Cooperation Organisation, the largest economic and military organisation in the world. Its accession into the Asian bloc signals Tehran’s willingness to enter closer strategic cooperation with Beijing and Moscow in pursuit of its own regional geopolitical interests. This paper briefly analyses Iran’s primary geopolitical objectives and instruments, and then addresses the implications of Iran’s SCO membership. Iran’s ambition for regional hegemony and through a powerful net of proxies as well as its decades-long fight to break the economic isolation imposed on it provides the why to its own ‘pivot to Asia’ policy, although to what extent it will be able to utilise its new alliance to reach those objectives still remain unknown.

Following the death of a young girl in police custody, a wave of demonstrations broke out in Iran during the fall of 2022. While the protests do not yet pose a serious risk for the regime at the time of writing, they happen at a time of significant geopolitical development for Iran. Its recent accession into the SCO perfectly illustrates the long-term shift in Tehran’s foreign policy – a newfound approach to multilateralism that could easily have global implications as well.


Iran’s struggle for regional hegemony

Challenging the status quo: Iran’s Middle Eastern proxy network

Iran’s ultimate geopolitical ambition is to become an acknowledged and respected regional power. Besides being among the region's largest and most powerful countries, the reason for this ambition is two-fold. As the main historical and geographical successor of the ancient Persian Empire, its national identity is infused with the pride and self-esteem of those who once gave birth to great civilisations, further exacerbated by its unique culture and language compared to its neighbours.[i] As the primary stronghold and de facto political leader of Shiite Islam, it acts with a sense of divine duty in trying to extend its religious influence and authority all over the Middle East; a mission that was reinvigorated by the 1979 Revolution that gave birth to the world’s first Islamic Republic as we know it today.

The current status quo of the Middle East undoubtedly favours Iran’s greatest strategic opponents, such as Turkey, Israel, the rich Sunni-majority Gulf countries and especially Saudi Arabia, which – by being home to Islam’s two holiest sites, Mecca and Medina – also claims primacy within the Muslim world. Despite this, modern Iran has no tradition of expansionism and is unlikely to forcefully invade any country in order to change the status quo. Instead of aiming to assume direct control over neighbouring territories by the use of military power Iran is a strong proponent of ‘regionalism’ – the development of a strong regional system based on the cooperation of local players of which Tehran can assume gradual leadership.[ii] In theory, both political necessity and a continuous export of ideology would contribute to the establishment of such systems, but their ultimate success depends on what extent is Iran capable of limiting the presence of global powers in the region. In spite of Tehran’s objections, the Saudis and the Gulf states repeatedly chose to compensate for their vulnerability through foreign military alliances while rejecting wider regional cooperations – precisely because of fear of increased Iranian influence.

There is an underlying but growing frustration within the Iranian foreign policy circles that stem from the country’s apparent potential to become an influential regional power paired with its scant chances of exercising it. Iran’s ability to act on its true geopolitical weight is hindered by multiple factors, such as the coalition of Sunni countries surrounding it as well as being isolated through political and economic means, i.e. the multitude of Western sanctions it endures ever since the Islamic Revolution.

During the past three decades, these circumstances left few options for Tehran to grow its influence, but it had found one, nonetheless. Since the early 1980s, Iran has been carefully cultivating a network of proxies throughout the Middle East, through which it can assert power and balance its interests in the region without risking direct confrontation.[iii] These proxies (opposition parties, rebel groups, militias and terrorist organisations) also serve the purpose of exporting Tehran’s Shia ideology. However, even though the religious split plays an important role in Iran and Saudi Arabia’s conflict, their opposing political and strategic interest remain the foremost reasons.

Tehran and Riyadh’s decades-long proxy conflict most resembles a regional cold war. Iran, for its part, has been attempting to (indirectly) get involved each time a conflict flares up in the Middle East to try to sway the outcome towards benefitting its interests and away from the realization of Saudi and American ones. For their part, in turn, Saudi Arabia and the United States support groups that can keep Iran’s growing influence in check on these various battlefields.

Iran’s proxy network under the de facto control of the Islamic Revolutionary Guard Corps (and its subsequent elite contingency, the Quds Force) began with the creation of Hezbollah during the Lebanese Civil war by funding and arming various Shia militias and then combining them together. The Iran-backed militias not only successfully influenced the outcome of the conflict but managed to remain a considerable force in the country even after the US and Israel had pulled out. Later, Iran followed the same strategy in Iraq after the country collapsed in the wake of the US-led invasion, and over the next several years its militias played an active role in the post-2003 Shia-centred nation-building efforts. The process eventually gave way to a Shia-dominated Iraqi government solidifying the power a decade after the US went in, and Tehran’s ex-militias taking up core positions in Iraq’s new armed force.[iv] Similarly, it is Iranian funds and weapons that back the militias sympathetic to Assad’s regime in Syria ever since the civil war broke out in 2011, and that provide strength to both Israel’s Hamas and the Houthi rebels of Yemen. To a lesser or greater extent, the Iran-Saudi ‘Cold War’ now involves certain groups and conflicts in nearly two dozen countries from the South Caucasus and Central Asia down to Western Africa and even Nigeria.

Situation of the Iran-Saudi Arabia proxy conflict as of August 2022. Source: Mauseburu, 2022.[v]

Throughout the past decades, the strategic placement of these proxies provided much success in weakening the US-Israeli-Sunni grip on the region,[vi] which further erodes as the United States continues to withdraw from the Middle East in its ongoing ‘pivot to Asia’ (as well as because of growing tensions between Russia and NATO in Eastern Europe). As the civil wars in Syria and Yemen remain unresolved, ongoing clashes threaten the frail ceasefire agreement of 2020 in Libya and remnants of ISIS are still at large in northern Iraq, the gradual withdrawal of the US presents even more opportunity for Iran to solidify and extend its hard-earned influence. But on its road towards its goal of regional hegemony, it would also need the support of global players as well.

From Hormuz to nukes: instruments of global pressure

Apart from emerging as a powerful geopolitical player within the context of the wider Middle East, Iran’s ambitions point toward a desire to put its weight into global developments as well. While its primary strategic goals remain reserved for achieving regional hegemony, the instruments in Iran’s possession have global implications and Tehran is prepared to use them accordingly. On one hand, Iran continuously attempts to break the economic and political isolation imposed on it by the West by seeking out other partners to balance the scales (more on that below), while on the other hand, it uses rapid technological advancement and geography as instruments of deterrence and leverage against the US and others.

In relation to military technology, Iran is among the most advanced countries in the region, especially in terms of cruise missiles, ballistic missiles and UAVs (Iranian military drones are on par with the Turkish and Israeli ones). But since the country shows considerable restraint when it comes to the prospect of direct confrontation, the world is less concerned about its military and way more concerned about its potential nuclear capabilities.

The motivation behind Iran’s ambitions to become a nuclear power is a complex one. One of the contributing factors is Tehran’s sense of self-importance stemming from its rich history and religious significance (as discussed above) fully warrants such an aspiration. So does Iran’s apparent paranoia when it comes to the West and particularly the US: decades-long anti-Iran rhetoric convinced Tehran that only with military deterrence can it avoid an eventual American intervention. Witnessing the fate of Saddam and Gaddafi once they let go of pursuing their own nuclear programs, the Iranian elite will certainly continue with theirs. Secondly, becoming a nuclear power is seen by Iran as the most effective way of asserting ultimate strategic control over its immediate neighbourhood and balancing Israel in the wider region. Learning from the example of India, Pakistan and North Korea, Tehran is convinced that once it announces the crossing of the nuclear threshold, the world will have no chance but to accept it.

Moreover, the state of its currently ongoing nuclear program is shrouded in obscurity on purpose. As long as its opponents (Saudi Arabia, Israel, United States and the general West) are not sure how close Tehran is from crossing the nuclear threshold – or even if it has already done so – the country can use the idea of nuclear weapons as both deterrence and bargaining chip (empowering Tehran to negotiate favours from the West in return to token nuclear concessions).[vii] Regardless of where it stands now and what it chooses to disclose, Iran’s ambitions of becoming an established nuclear power are very real and are cause for serious concern for the US and its allies.

Similarly, Iran can utilise its geographical position in order to gain strategic and economic advantage. The Strait of Hormuz which connects the Persian Gulf and the Gulf of Oman is one of the world’s most important strategic chokepoints, as approximately 30% of the globe’s seaborn-traded crude oil flows through it.[viii] The southern shores of the strait belong to the UAE and Oman, while the north is under Iran’s control entirely. Additionally, a number of other important oil producers depend on the strait, such as Saudi Arabia, Iraq, Kuwait and Qatar. A perfect place for conflict.

Since as early as 1984, the Strait of Hormuz has been the scene of ever-oscillating tensions. In 1988 a one-day battle took place between the US and Iran, resulting in the sinking of several vessels in the strait. Ten years later, a series of naval stand-offs took place between the same parties, prompting the commander of Iran’s Revolutionary Guard to declare that if either Israel or the US attacks Iran, it will seal off the Strait of Hormuz, ‘holding hostage’ a third of the world’s oil.[ix] In 2011-12 the same threat was made again in response to newer sanctions on Iranian oil. The situation escalated until a coalition flotilla made of eighteen American, British and French vessels had to be dispatched to deter Tehran from doing so. General escalation would continue from 2015 onward with incidents nearly every year, involving stand-offs, captured tankers, brief exchanges of fire and provocative missile tests.[x]

Neither the significance of the Strait of Hormuz as leverage in the hands of Tehran nor its ability to hinder shipping by sealing it off should be underestimated. A 2002 US war game, for instance, proved that Iran was not only capable of closing the strait but even defeating the far superior US naval forces within it using tactics of asymmetrical warfare.[xi] Furthermore, even without taking deliberate steps on either side, the situation in the Strait of Hormuz remains one of the most dangerous, since the narrow sea lane teeming with both military and civilian vessels provides ample chance for accidents and mistakes as well. Any escalation within the strait, therefore, also increases the possibility of unplanned incidents happening, driving the conflict further.[xii]



Tipping the scales: Iran in the SCO