GUEST BLOG: Graeme Doull – Iran’s most dangerous course of action

If Iran decides escalation is the only leverage it has left, the real global shock may not come in the Strait of Hormuz — it may come from precision drone strikes on fragile fuel infrastructure thousands of kilometres away.

While the world watches the Strait of Hormuz, the greater threat may come from somewhere less expected – precision drone strikes executed against a handful of highly concentrated downstream fuel infrastructure nodes outside of the immediate region. In a system built for efficiency rather than resilience, even a small number of long-range drone strikes could trigger outsized economic shock, panic buying, and cascading issues worldwide.

US strikes may have landed real blows against the Iranian regime, but Iran should not be mistaken for a defenceless or cowed state. Its most dangerous leverage is not conventional military power; it is the ability to disrupt fuel supply, push prices higher, and create panic well beyond the region.

Many expect Iran’s path forward will be to absorb the attacks, negotiate, and eventually find a way to restore oil exports in some form. That remains the most likely outcome. But it is worth considering what could follow if Tehran instead decides to widen the war by further impacting oil supply through offensive action.

Three ways Iran could weaponise the global oil market

Iran has three broad options to do this: continued pressure in the Strait of Hormuz; striking oil production in neighbouring states; or pursuing a less obvious approach – attacking the downstream facilities in fuel-consuming countries outside the immediate region. All three could disrupt supply – but only one does so without inviting immediate retaliation.

The first two options carry severe risks for Iran, and for China, its most important economic backer. China’s importance should not be ignored – it relies heavily on imported fuel and is currently drawing on oil reserves, a temporary measure that is not sustainable.

Disrupting Hormuz would harm Iran as much as its adversaries, and attacks on regional production would almost certainly invite immediate retaliation against Iranian production facilities. These scenarios have been widely explored and, beyond noting their cost to Iran (and China), need little further examination here.

The third option has been less discussed – and is less likely – but potentially more dangerous: striking downstream refining, storage, import terminals and distribution nodes outside the region, especially in fuel-distributing nations like South Korea or Singapore, or other allies of the US.

The vulnerability lies in how modern fuel systems have evolved: they are lean, efficient – and dangerously concentrated. Over the past four decades, refining capacity has consolidated into fewer, larger facilities.

The United States now operates roughly 130 refineries, down from more than 300 in the 1980s. Europe followed the same trajectory, with major economies such as the United Kingdom, France, and Germany relying on a relatively small number of refineries concentrated in limited industrial hubs, while increasing volumes of refined product move through complex, interdependent networks of ports, pipelines, and storage terminals. Smaller developed economies have gone further, in some cases eliminating domestic refining altogether and relying entirely on imports.

The result is a system optimised for cost and efficiency. It depends on a narrow set of critical nodes – refineries, import terminals, and distribution chokepoints – that are difficult to defend, slow to replace, and highly vulnerable to disruption. Efficiency, as is often the case, is the opposite of resilience.

Ukraine has already demonstrated how effective long-range drone strikes can be against oil infrastructure. Repeated attacks on Russian refineries, ports, terminals, and pipelines have disrupted fuel production and exports. Relatively cheap, long-range strikes can create strategic shock without needing to defeat a military force in the field. Like Ukraine, Iran is a leader in drone warfare and could strike oil infrastructure from thousands of kilometres away.

Iran’s most dangerous course of action is attack on downstream oil infrastructure that could cripple domestic economies and have far-reaching effects. Even limited strikes could trigger panic well beyond the immediate damage, potentially setting off a protectionist cascade. In response to any attack, oil-consuming nations are likely to move to increase stockholdings to reassure their domestic audiences. This would drive spiralling prices and scarcity as every nation tries to secure their own supplies.

Iran may not choose this path. But if it did, the effect would be immediate, asymmetric, and politically powerful. Disruption to fuel distribution in other nations would amplify pressure to reopen the Strait of Hormuz – shifting leverage back toward Iran.

Why the West should already be preparing

Despite the lower likelihood of this scenario, Western aligned nations should be actively preparing for it: understanding vulnerabilities in refineries, terminals, and depots and – more importantly – accelerating the development and deployment of counter-drone systems to protect critical infrastructure.

Low cost, long range drone warfare has the potential to be a lethal weapon in economic warfare. The broader implications here should not be ignored.

Graeme is a retired armoured corps officer and a veteran. After leaving the military he has had a very successful career in civilian logistics.