Iran

The 12-month probability of a new armed-conflict onset on Iranian territory is 57.6%, a critical risk. Iran’s history of interstate war, insurgency, political violence, and contested authority leaves substantial exposure to renewed domestic or external conflict. Its powerful security institutions, economic strain, and central role in regional confrontation further increase the consequences of political breakdown or escalation.

Recent reporting describes an active US-Israel war involving Iranian territory, including US strikes on missile launchers on Larak Island and Iranian attacks on US bases in Jordan on August 30. Washington has threatened further action, while Tehran and the IRGC are contesting control around the Strait of Hormuz. CNN also reports an internal power struggle that could influence the war’s direction; the relevant forward risk is whether this confrontation produces a distinct new phase of armed conflict inside Iran.

The greatest uncertainty is whether US, Israeli, and Iranian leaders contain the exchange or widen it, and whether pressure on Iran’s economy and governing institutions generates armed internal fragmentation. Further strikes on Iranian territory, renewed attacks around Hormuz, or visible splits within the security establishment would raise risk; a durable ceasefire, credible nuclear diplomacy, and restored command cohesion would lower it. Prediction markets separately imply 15.5% for a US invasion before 2027 and 6.5% for regime fall, while pricing a final nuclear deal by year-end at 10.5%.