Israel continues to pound Iran with air strikes as the war between the two countries enters its second week. Israel is aiming to destroy Iran’s nuclear program, and Iran has responded with barrages of missiles. But Prime Minister Benjamin Netanyahu also seems to have a broader mission, namely the weakening and potential collapse of the Islamic Republic. One big question now looming: Will the United States join war?
If the fighting devolves into a war of attrition, which side would have the advantage? Has a city the size of Tehran ever been evacuated? And why doesn’t Israel have its own “bunker-buster” bombs?
Those are just a few of the questions that came up in my recent conversation with FP economics columnist Adam Tooze on the podcast we co-host, Ones and Tooze. What follows is an excerpt, edited for length and clarity. For the full conversation, look for Ones and Tooze wherever you get your podcasts. And check out Adam’s Substack newsletter.
Cameron Abadi: Should we think of this conflict between Israel and Iran as a war of attrition—and, if so, who exactly has the advantage?
Adam Tooze: I think one has to start by saying just simply how weird it is as a war, right? I mean, there’s a way in which it’s been so long anticipated—over decades indeed. Netanyahu’s career has been largely shaped around his personal obsession with the Iranian nuclear threat—and there’s such a blur of aggression right now that it’s perhaps difficult to get sharply into focus just how odd this conflict is. Because first and foremost, Iran and Israel are a very, very long way away from each other. The capitals are 1,600 kilometers apart, that’s almost a thousand miles. It’s as though the plucky Netherlands had decided to declare war on Italy and was attempting to bomb Rome or Madrid. I mean, it’s a vast, vast distance. The way the Israelis are doing this is by means of their air force, which is flying about 200 combat aircraft, and dropping bombs. These are upgraded dumb bombs in large part with precision guidance to enable them to hit heavy targets and do damage. And the Iranians, as you’re saying, are responding with ballistic missiles because they don’t have an air force that they can get into the air. About 20% of the Israeli attacks in quantitative terms are actually against the nuclear facilities, so far at least. The majority of the attacks are hitting military targets in general, and in part this is to destroy the Iranian command structure, in part is to limit Iran’s ability to retaliate, both to suppress its air defense systems and to suppress the ballistic missile firing sites from which the Iranians are responding.
In historical terms, it’s a very weird asymmetric type of war when one side attacks with an air force and drops bombs and the other responds with ballistic missiles and cruise missiles and drones. The new element in the equation is the Israeli ability to intercept the incoming rockets, which is very advanced. Very few of the drones make it into Israel, if any at all. But the ballistic missiles that the Iranians are firing are much, much more complicated to intercept. These things are going at like five times the speed of sound, if not even faster. And the Israelis have this enormously sophisticated—it isn’t the Iron Dome, that’s the system that they used against the primitive Hamas rockets and is used also against the drones—this Arrow interceptor system they have backed up by Patriot and other American missiles at closer ranges is truly a system designed for intercepting almost intercontinental ballistic missiles. So it can fire out to ranges of thousands of kilometers and hit the Iranian rockets high up in the arc.
The thing about this is that all of the cards appear to be in Israel’s hands, but this air defense system of theirs is very expensive. According to Israeli estimates, it’s costing them about $280 million a night to keep Israel safe, firing these missiles. Because the Iron Dome interceptors are cheap, they’re about $50,000 each, but all they’re doing is knocking down really crude incoming weaponry. The rocket interceptors are three million dollars a piece, so when you’re firing lots of those, even a country as rich as Israel begins to feel the strain. And it would seem to be the balance between on the one hand, the ability of the Iranians to absorb asymmetric casualties, the hardened nature of the regime, the fact that Iran within living memory in the 1980s went through the war of the cities with Iraq, which cost thousands of lives in Tehran, and on the other hand, Israel’s ability to defend its population, which presumably has a much lower pain threshold, with this very, very expensive, highly sophisticated, air defense system, that’s going to, I think, make the difference. Israel may get to the point where it runs out of interceptors and it can declare a victory and, you know, the whole thing can be called off and talked down.
CA: U.S. President Donald Trump has suggested that the entirety of Tehran ought to be evacuated to protect the civilians. What sort of city is Tehran, and when was the last time a city of that size has been evacuated, if ever?
AT: The city is gigantic. The urban core is nine million heading to 10. The broader metropolitan area is 14 million people. In the MENA region, one of the great settled urban centers of world history, it is the third largest conurbation after Cairo and Istanbul. It’s far larger than Israel as a whole. It’s larger than any city in the United States, and it’s being treated as this sort of disposable battleground by Israeli and American spokespeople. I mean, we tend to associate Iran with A, ancient things, Persia, and B, Islamic things, the Revolution of 79, and we think of Tehran as the capital, and so we think it as ancient and Muslim. But in fact, it has no claim to being a major center of religious authority, and it isn’t old. It’s about as old as Berlin. So it was designated as the capital city of modern Persia in the early 19th century. It reached about 200,000 inhabitants in the late 19th-century, rises to a million in the mid-20th century and then explodes.
So really it’s an emerging market capital city of those kind of dimensions. It’s analogous to—culturally, of course, very different, but like in scale—to a Mexico City type explosion in terms of population. Most of the buildings, as far as I’m able to gather, are from the 1960s, right? This isn’t an ancient city in that sense. But it’s a vibrant, gigantic urban hub, which has attracted the vast majority of migration and demographic growth in Iran, which until recently was very, very dramatically rapid. It’s a very young city. Its median age is early thirties, so 10 years younger than a Berlin or a New York. 10 years older than a Gaza, whose median age is 18. Unsurprisingly, it’s really disturbing to talk about and read about the way in which a space like this can be treated in such an offhand way.
CA: Could Israel become a regional hegemon in the Middle East by weakening Iran? Or would there be sort of other shifts in the region as a result of that kind of bid for hegemony?
AT: I mean, Israel’s clearly the dominant power in the region at this moment in the way that it’s really never been before. When the Oct. 7 crisis started, you and I talked about this and emphasized the difference between Israel’s position now and, say, its position in ’73 or ’67 or the early history of Israel. And the persistence of this myth, of Israeli vulnerability as a basic justification, at this point surely we can drop that pretense and simply say they’re the dominant military power in the region by a long margin, not to say top dog or bully. But that doesn’t mean they’re a hegemon, right? Because the logic of hegemony is precisely that it’s power blended with soft power. It’s hard power and soft power together. It’s some kind of political sway or legitimacy, some sense of what the Chinese would call common fate, this sense of developing in the same direction. And it’s not impossible to imagine Israel being the leader of that kind of regime. I mean, that’s the Abraham Accord vision, right, that the Trump administration put and Netanyahu quite likes and the idea that somehow a deal can be done between Israel and the Gulf States and Saudi Arabia that will take the entire region to a higher level and will marginalize the Iranians and suppress the Palestinian question. And there’s no question, I think, that Arab elites, notably in Saudi and the Emirates, were perfectly happy to sign up to that deal if only Israel would make it possible for them to do so. But the level of violence that’s being dealt out by Israel makes that incredibly difficult for Arab elites to sign up to.
CA: When it comes to Iran’s Fordow nuclear facility, which is buried under a mountain, it’s often mentioned that the United States has so-called bunker buster bombs at its disposal that Israel does not. Why exactly can’t Israel develop those kinds of weapons?
AT: Yeah, so I was first taken aback by this as well until I learned that not all bunker buster bombs are alike. So Israel’s air force does have very, very large munitions, which are colloquially referred to as bunker busters, they’re this GBU series which come with numbers. And in the bombing of Hezbollah and the targeting of Hassan Nasrallah last year, the Israeli Air Force is estimated to have used maybe three or possibly four times as many of these very heavy bombs in a single raid on four tower blocks as the United States used in the entire 2003 shock and awe invasion of Iraq. So just for one block, for one targeted killing, 80 of these extremely heavy bombs. And the fact that they’re so heavy matters because what they’re able to do is crush their way through buildings, and then you can set a timer on the explosive warhead so basically you can, as it were, systematically demolish even a really large complex which might be hardened. The Israelis thought there were probably bunkers inside these tower blocks in Beirut. But the thing is that the Fordow facility is a whole other level of protection. So it’s in a mountain. We think there are tens of meters of concrete above the relevant facilities. And for that, really, there doesn’t seem to be any alternative to an even bigger one of this GBU series. And so you need the GBU-57, apparently, to give you any chance. This is just an extremely heavy bomb, which penetrates through even the hardest rock when it’s dropped from high altitude and has an explosive charge of almost 14 tons. So it’s an absolutely gigantic explosive charge. Nothing about this is very sophisticated. The Israelis could easily do it, except that their air force consists of essentially fighter bomber type aircraft, so F-15, F-16, F-35. And you can kit them out to carry quite a lot of ordnance. These aircraft can be kitted out with a huge amount of ordnance, but what you can’t get them to do is to carry ultra heavy bombs of this kind of weight. And for that, you need the heavy bombers. And so that will be the B2 in the American case. So a stealth bomber, a strategic bomber originally designed for the confrontation with the Soviet Union. And the Israelis, though they’re a rich country, invest their military bucks wisely, and they have never seen any need to hold a strategic bombing force. They have the deterrent ballistic missiles, they have submarines to give them the nuclear triad, but they don’t have large scale strategic bombing forces. And for that they would have to rely on the U.S. Because that’s a hundreds of billions of dollar program to develop an air force system like that, and the Israelis are not in the business of doing that.
CA: What exactly is the impact of this ongoing conflict on the world economy so far?
AT: Yeah, it’s interesting to address this because for many years, this war has been telegraphed, and the idea of an all-out Israeli assault on the Iranian nuclear program was always the Big One. This was going to be the earthquake that would shake everything loose. And here it is, and we’re not seeing that devastating shock to the world economy. And I think it’s the result, in a sense, of the long running isolation of Iran and to do with the broader factors that are work in the oil market right now, because it’s through the oil market that this damage would be done. And Iran has been squeezed to such an extent that it’s less than 2% of global oil supply. 90% of it goes to China, but it is by no means China’s largest supplier of oil. China has a captive supplier in Russia, which can offset any loss from Iran. And so the perturbations we’ve seen in the global oil market have been really quite minimal. This comes on top of the fact that oil stocks are actually large, and the Saudis are struggling with OPEC to devise a policy on prices. We’ve talked about this on the show. They can’t decide whether to go on trying to restrict production or to just go for a more full-throated production mode. We have the American fracking industry in the background, which can ramp up production, and prices go up. So we really aren’t any longer in the kind of hair trigger conditions of former times. Almost all of the risk is in some kind of last-ditch mad dog escalation on the part of the Iranians. If the regime was faced with utter destruction, who would want to bet against them doing one of two things or possibly both? And one would be an attack on the tanker traffic through the Straits of Hormuz, the old tanker war kind of tactic. And the other would be an even more radical approach, more like Saddam Hussein, like an assault on Saudi, for instance, or Emirati oil production capacity with these rockets, which are challenged when they’re firing them at Israel but might have a better chance of doing serious damage to those oil fields. The Houthis have done that kind of thing in the past with quite dramatic effects. And that, I think, is really the real worry for the global economy. Apparently market insiders think there’s a 20% chance of Iranian capitulation, there’s a 45% chance of Israel deciding it’s done enough and just deciding to put an end to this war. So the markets are sort of attributing a two thirds kind of probability to outcomes which really stabilize. Then there is a quarter chance, according to market estimates, of U.S. intervention, which is the nightmare lurking on the horizon. And a 10% chance of the Iranians responding to the crisis by means that would radicalize the conflict, including pushing towards actually completing a nuclear bomb. Because if the Israelis are taken seriously and the logic of this attack was that the Iranians were on the cusp of being able to actually manufacture a weapon and the Israelis can’t strike the underground facilities effectively without the Americans, there has got to be some probability that in fact Iran responds to this by going nuclear, or at least getting to the nuclear point. And so that’s also on the market radar and that’s also in a corner of the mood at the moment. But if you look at the overall balance of pressures and of risks, we aren’t seeing panic. It’s really kind of eerily quiet in the markets at this point.
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