Suggested Citation:
Brumberg, Daniel, Jareer Elass, Amy Myers Jaffe, Kenneth B. Medlock III (2008) The Global Energy Market: Comprehensive Strategies to Meet Geopolitical and Financial Risks - Iran, Energy and Geopolitics. James A Baker III Institute for Public Policy

Iran’s role in the Persian Gulf region has great bearing on stability of the Middle East and, by extension, energy security. Iran’s active support for such subnational groups as Hizbollah is a major factor in regional politics, as highlighted by Israel’s conflict with Hizbollah in Lebanon in the summer of 2006. That lingering conflict could, if not properly managed by effective diplomacy, expand to embroil a wider range of countries and it remains a destabilizing factor in the region. Iran’s role in Iraq also gives Tehran a pivotal input into regional stability. An expanded proxy war in Iraq – fanned by the actions of its neighbors – could create a political and humanitarian crisis of even greater proportions and would be detrimental to the region as a whole. An expansion in violence in Iraq and beyond would also greatly damage the stability of the oil market.