🟢 US bombs Iran, India again rejects water treaty | Global Risks Weekly Roundup #25/2025.

Executive summary

The US attacked three nuclear sites in Iran, likely setting back their nuclear program by by years, but the locations and future of Iran’s nuclear stockpile remain unknown.

A weakened Iran will likely respond meekly, although forecasters now deem it more likely than not that Iran will attack a US base in the region. A nuclear detonation in the Middle East is extremely unlikely.

Trump suggested that regime change could “Make Iran Great Again”.

India continues to oppose the key Indus Waters Treaty that it had previously agreed with Pakistan.

Anthropic continued its research into blackmail by AI models.

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Geopolitics

Middle East

The US attack on Iran

The United States entered the Israel-Iran conflict, striking Iranian nuclear sites at Fordow, Natanz and Isfahan. The US committed 125 military aircraft to the operation, with fighter jets helping to clear the path for seven B-2 stealth bombers that took off from Whiteman Air Force Base in Missouri. They were aerially refuelled en route to Iran by tankers that had earlier been deployed to Europe.

The B-2s collectively dropped 14 bunker buster bombs (two from each plane), with two hitting Natanz and the rest hitting Fordow. This reflected fears that a single bomb wouldn’t be sufficient to cause serious damage to Fordow, which was buried at least 80-90m underground and heavily reinforced; Iran was long cognizant of the possibility of an American attack with these GBU-57 bombs.

Satellite imagery of the Fordow complex displays six fresh craters, with two separate points each having been targeted by at least three separate munitions. The grey colouration of the ground suggests that concrete was hit. It’s unlikely that the facility was destroyed, but it probably suffered serious damage.

The Isfahan site was targeted by Tomahawk cruise missiles launched by a US submarine in the Arabian Sea.

Takeaway: Iran’s nuclear program has been significantly set back, but the locations and future of Iran’s nuclear stockpile remain unknown.

Iran’s response

Iran claimed that “most of the highly enriched uranium at Fordow was moved to an undisclosed location prior to [the] US attack”. Israeli officials appeared to corroborate this. Satellite imagery suggests that there was heightened activity around Fordow a few days before the attack but doesn’t conclusively show the transportation of nuclear material out of the site. One site that may be even more secure than Fordow is Kūh-e Kolang Gaz Lā, but this may have been targeted in the US bombing of Natanz (it lies just outside the southern perimeter), and Iran may have other sites that aren’t publicly documented.

Iran vowed that the attack would have “everlasting consequences” and said that the US must receive a response. The team examined some of Iran’s options:

• Forecasters believe that there’s a 67% chance (range: 55% to 75%) that Iran (not just one of its proxies) strikes a US base in the Middle East by the end of August. There are a number of bases they could possibly strike, from Bahrain to Iraq. Following the assassination of Iranian general Soleimani during Trump’s first term, Iran did strike a US base but provided notice beforehand, meaning that there weren’t any reported deaths, although service members did suffer brain injuries.

• They forecast a 28% chance (range: 15% to 42%) that Iran will block the Strait of Hormuz or attack a tanker in the Strait by the end of August. Iran’s parliament reportedly voted for the Strait to be blocked, but it’s not clear whether the vote was held on a bill, and the Supreme National Security Council in Iran ultimately has the final say. On the one hand, the Iranian parliament’s vote could have been carefully choreographed by the regime; on the other, it could be a symbolic move that only highlights the regime’s lack of will. Messing with the Strait could also undermine Iran’s own ability to export oil, especially to China, though Iran could try to single out tankers headed for Europe. Russia would benefit from higher oil prices, but they’re unlikely to significantly influence Iran’s decisions.

• They believe there’s an 11% chance (range: 5% to 25%) that Iran will strike an oil facility in a Gulf State by the end of August, because Iran probably doesn’t want to undermine any support it might have in these states or the Muslim world as a whole.

• They also think there’s a 59% chance (range: 40% to 70%) that, by the end of August, there will be an attack publicly attributed by the US to Iran that involves the death of at least one US citizen or service member anywhere in the world.

Takeaway: A weakened Iran will likely respond meekly, although forecasters now deem it more likely than not that Iran will attack a US base in the region.

Israel-Iran exchanges continue

Throughout the week, Israel continued to target top Iranian officials and ballistic missile and nuclear sites. There was also a cyberattack on one of Iran’s main banks, while many Iranians faced an internet blackout for multiple days. Iran, in turn, hit an oil facility in Haifa, the Weizmann Institute of Science, and a hospital in Southern Israel. They also targeted a military and intelligence complex in Tel Aviv, missing by 300 m. Qatar, meanwhile, provided an update on the functioning of the world’s largest gas field (South Pars, in Iran), saying that it was operating normally despite having been hit by Israel.

The International Atomic Energy Agency (IAEA) judged that Israel’s strikes on Iran’s main enrichment facility at Natanz may have been more than surface-level: not only did the destruction of an above-ground electrical substation likely damage the centrifuges there, the strikes likely caused direct damage to the underground facilities. In addition to Natanz, the nuclear sites that Israel has targeted on at least one occasion now include Isfahan, Arak and Fordow.

At Isfahan, a chemical laboratory, uranium conversion plant and metal processing facility were hit, along with a reactor fuel manufacturing plant. Conversion of uranium gas back into a metal is one of the last stages of building a nuclear weapon. At Arak (also known as Khondab), an under-construction heavy-water reactor was hit because of the risk that it could produce weapons-grade plutonium.

Takeaway: Israel seems to be in a strong position to continue the war and take any Iranian attacks in stride.

Regime change?

US President Donald Trump demanded “unconditional surrender” from Iran and claimed that the US knows the Ayatollah’s location but isn’t going to target him “for now”. The prospect of regime change was also raised by Israeli Defence Minister Katz, who called for the Ayatollah to be killed. Israeli PM Netanyahu was more coy, saying that his country’s actions could create the conditions for an organic uprising of Iranians.

But following the US’s attack, Netanyahu said that Israel was “very, very close” to achieving their objective of eliminating Iran’s nuclear and ballistic missile capabilities, and US Defense Secretary Hegseth said that the attack on Iran was not aimed at regime change. However, Trump later suggested he might be supportive of regime change in Iran in order to “Make Iran Great Again”.

Ayatollah Khamenei, meanwhile, reportedly handpicked three potential successors as he sheltered in a bunker. Various groups within Iran are also discussing what a future regime might look like and how to achieve a future without Khamenei.

Forecasters believe there’s now a 65% chance (range: 32% to 90%) that the Ayatollah will be killed or flee Iran before the end of 2025, and a 59% chance (range: 23% to 90%) that the Islamic Republic of Iran will fall by the end of 2025. There is strong disagreement amongst the forecasters, with some arguing that regime change is unlikely to occur because there is no credible alternative to the regime, whereas one forecaster sees the demise of the regime as all but inevitable because of the regime’s unwillingness to agree to American demands, together with its decline and domestic unpopularity.

Takeaway: Future of the Iranian regime very uncertain, with different perspectives arriving at very different predictions.

A nuclear detonation?

The Trump administration likely at least evaluated the use of a tactical nuclear weapon to destroy Fordow, but forecasters thought it was exceptionally unlikely that Trump would use one.

More broadly, forecasters continue to think it’s extremely unlikely that there will be a nuclear detonation in the Middle East within the next 12 months, estimating a 0.07% chance (range: 0.01% to 0.7%). Although Iran has likely moved some of its nuclear material to other sites and could attempt to ‘break out’, the US and Israel would almost certainly learn of any such activities, and moreover, many Iranian nuclear scientists have now been killed. The US did not use a tactical nuclear weapon to destroy Fordow, and Israel is extremely unlikely to feel threatened enough by Iran that it resorts to the use of its own nuclear weapons. All things considered, most of the forecasters think that the strikes reduce the probability of a nuclear detonation in the Middle East within the next 12 months and over the next decade.

Takeaway: A nuclear detonation in the Middle East is extremely unlikely over the coming decade.

Europe

Russia’s President Vladimir Putin reiterated his belief that “Russians and Ukrainians are one people, in this sense all of Ukraine is ours”. Forecasters noted that the fact that Putin is still publicly saying things like this doesn’t bode well for the prospect of a peace deal being reached in 2025.

The head of Germany’s foreign intelligence service (BND) warned that, “We are very certain, and we have intelligence evidence for this, that Ukraine is just a step on the path to the West…. They want to catapult NATO back to the state it was in at the end of the 1990s. They want to kick America out of Europe, and they’ll use any means to achieve that”.

Spain rejected a NATO goal of allocating 5% of its GDP to defence spending. Instead, the country reached an agreement with NATO that would allow it to spend only 2.1% of its GDP to meet NATO core defence spending requirements. Spain is the only country to reject the 5% spending target; it had been planned that unanimous agreement would have been a showpiece of the NATO summit to be held in The Hague this week.

A parliamentary inquiry in the UK finds that the country lacks plans to defend specialized internet cable repair ships in a military conflict.

United States

Trump activated an additional 2,000 National Guard troops in California in response to anti-ICE protests. A federal appeals court allowed the deployment of federalized National Guard troops in California to continue. Anti-ICE protests have largely died down in Los Angeles; however, ICE raids are having a chilling effect on some Los Angeles businesses.

Trump’s border czar, Tom Homan, said that Immigration raids at farms and hotels will continue – but later, Trump said that farms would be spared.

Our forecasters now estimate the risk that the Trump administration will invoke the Insurrection Act by the end of July to be 18% (range: 5% to 50%). Invoking the Insurrection Act would allow the military to be used for law enforcement within the US. Trump said in his 2024 campaign that he would use the military for immigration enforcement. An executive order signed on the first day of his second term requested a recommendation within 90 days of whether to invoke the Insurrection Act to deal with illegal immigration at the border. When the recommendation was not made, Trump issued a memorandum that provided additional guidance about the use of the military in securing the southern US border. However, as Trump’s attention has shifted to Iran over the past week, our forecasting team feels that the chance that the Insurrection Act will be invoked over the coming weeks is now lower than it would have been otherwise.

Asia-Pacific

India says it will never restore the Indus Waters Treaty with Pakistan.

A UK warship sailed through the Taiwan Strait for the first time in four years, as part of a UK carrier strike group deployment to the region that the UK says is in accordance with international law. China reacted by calling the transit an "intentional provocation" that "undermines peace and stability".

Africa

After US-led negotiations, the Democratic Republic of Congo (DRC) and Rwanda plan to sign a peace agreement on June 27. The DRC has accused Rwanda of backing rebels in eastern DRC.

An attack in Nigeria killed 150 people. Raids from herdsmen into farmer communities are subjectively becoming more common.

Technology

Last week, we reported on Zuckerberg’s move to build a new AI lab to develop artificial superintelligence. Zuckerberg has been aggressively attempting to recruit top talent from other AI companies, with Sam Altman saying that Meta has offered his employees $100 million bonuses to recruit them.

New research by Anthropic finds that many frontier AI models will engage in blackmail a high percentage of the time in stress-tests. In their testing, Claude Opus 4 engaged in blackmail 96% of the time, while Gemini-2.5-Pro did it in 95% of cases tested. Models were reportedly more likely to engage in blackmail when they said they believed they were in the real world as opposed to a simulation. In one extreme scenario, many of the models appeared to be willing to resort to murder. Notably, Anthropic reports that the blackmailing behavior emerges despite only business instruction. “It wasn’t due to confusion or error, but deliberate strategic reasoning, done while fully aware of the unethical nature of the acts”.

The OpenAI Files gather a detailed collection of documented concerns with OpenAI’s governance, leadership, and organizational culture,

OpenAI published a blog post on the topic of AI-enabled biological risk. In the post, they cover the mitigations they’re putting in place, announce that they’ll be hosting a biodefense summit in July, and say that they “expect that upcoming AI models will reach ‘High’ levels of capability in biology” as measured by their Preparedness Framework.

In investigating the phenomenon of “Emergent Misalignment,” in which training AIs on bad code causes them to become misaligned across other domains that have nothing to do with coding, OpenAI found features in AI models that correspond to misaligned personas. These features can be used to detect misalignment before it manifests, and can be dialed up and down to attenuate emergent misalignment.

The data center operated by xAI outside of Memphis is facing a lawsuit for operating a fleet of natural gas turbines without permits.

California is moving towards attempting to regulate frontier AI again.

SoftBank CEO Masayoshi Son is pitching a $1-trillion AI-robot industrial complex in Arizona.

Microsoft is reportedly considering walking away from talks with OpenAI over the future of their relationship, relying on their access to OpenAI models and IP rather than getting worse terms by acceding to OpenAI’s restructuring.

Amazon’s CEO said that he expects AIs to start to replace some employees in the company’s corporate workforce starting within a few years from now. Amazon is the second-largest private employer in the US.

Biorisk

The United States Department of Agriculture (USDA) is developing a potential plan to vaccinate poultry against bird flu. The US chicken industry has historically been opposed to vaccinating chickens against H5N1, primarily because of fears over its impact on exports, but the USDA plans to officially evaluate the impacts of vaccination on trade.

The US FDA approved a twice-a-year shot that prevents nearly all HIV transmission. The drug in the shot is made by Gilead Sciences and is used both in this preventive shot and in HIV treatment. However, it is unclear how many people at high risk of contracting HIV globally will be able to gain access to the drug; the US list price, i.e., before insurance, is $28,218 per year. There are about 1.3 million new HIV infections worldwide each year; about half of all new infections are in women.

An actuarial study finds that life expectancy for people aged 22 to 44 in the US is expected to drop in 2025 but projects that mortality rates among people in that age group will stop increasing sometime between 2026 and 2029. “Today, mortality rates for older people have gotten back to normal, but COVID, the effects of COVID on the health care system, the opioid epidemic and other factors are still causing a noticeable increase in mortality for people ages 22 through 44.”

Economy

The price of Brent crude oil jumped slightly at market open on Monday, following US military strikes on Iran’s nuclear facilities, and is hovering around $77/barrel on Monday; on Sunday night, oil futures jumped 2%. Oil prices have climbed steadily throughout June, from $62.78/barrel at the end of May, as tensions with Iran have increased. If Iran were to close the Strait of Hormuz in retaliation for Israeli or US strikes, oil prices would be expected to increase dramatically, as 20% of the world’s oil consumption flows through the strait. See above for forecasters’ estimates.

China’s housing market is projected to remain in a slump for years to come. While the sector has moved into a gentle decline after entering a free-fall in 2021 that posed risks to China’s broader economy, an oversupply of housing continues to dampen housing prices and new construction.

Yields on 30-year and 40-year Japanese government bonds are holding steady. We continue to watch these markets because of the potential tail risks associated with increasing long-term Japanese treasury yields.

Climate and Nature

A study published in Nature projects that every 1°C of global warming will reduce global food production by an average of 120 calories per person per day.

If humans keep burning large amounts of fossil fuels, maize production could fall by 40% in the grain belt of the US, eastern China, central Asia, southern Africa and the Middle East; wheat production could fall by 40% in the US, China, Russia and Canada; and soybean yields could fall 50% in the US. The only staple crop that might be able to avoid substantial losses is rice, which can benefit from warmer nighttime temperatures.

Via CNN