The geopolitical crisis following the assassination of top Iranian General Qasem Soleimani will soon enter a delicate phase that, inevitably, will call for a response by the oil and gas industry, which could easily become a target in the dispute.

Soleimani was killed by a US air strike in Iraq early on Friday. The Iranian military commander was one of the most powerful figures in the Islamic Republic, thanks to his active involvement in the development of the country’s military presence in Lebanon, Iraq and Syria. Soleimani’s sphere of influence made him a key actor in the fight against ISIS and, more in general, in the Iranian political scene, where Ayatollah Ali Khamenei once described him “a living martyr of the revolution.”

The United States justified its action by arguing that Soleimani, as head of the elite Quds Force of the Iranian Revolutionary Guard Corps, was responsible for the deaths of thousands of Americans. In addition, representatives at the Pentagon highlighted the potential risk associated to several other attacks on the Iranian agenda, which they claimed would have threatened American diplomats and officials based in Iraq.

Iran has expressed condemnation of what has happened, and while Foreign Minister Javad Zarif called the attack an act of “international terrorism,” President Hassan Rouhani confirmed the intention of his country not to stay powerless. Indeed, the respect and admiration for the Soleimani’s position within Iranian society strengthen the extent of the effects Tehran’s revenge could generate sooner or later.

Fears around Iranian retaliation in the short term will increase pressure within the halls of oil companies due to the potential impact on their operations in the region. Corporate boards, executives and managers will have to focus on understanding Tehran’s decisions in the near future. The effectiveness of the scenarios and strategies elaborated by experts could make the difference in managing the outcome of difficult situations that would deploy themselves in the next months, or days.

On Friday, global oil prices surged on fears of Iranian retaliations against sensitive facilities and oil workers. The international benchmark for crude oil jumped by more than 4%, with repercussions on consumers. Markets are nervous as the flow of oil could be disrupted if tensions evolve into a war. For example, oil shipments could be at risk in the Strait of Hormuz, which, linking the Persian Gulf with the Arabian Sea, is bounded to the north by Iran and to the south by Oman and the United Arab Emirates. The relevance of this shipping point is demonstrated by the fact that in 2018, according to the International Energy Agency, about 21 million barrels per day flowed through it.

Saudi Arabia, the UAE, Kuwait, Iraq and the US all use this route, and nearly 80% of the total amount exported goes to Japan, China, South Korea and India. Creating instability in the Strait of Hormuz could represent a weapon in the hands of Iran to confront the US and its allies.

But even drone attacks on energy infrastructures must be taken into account to analyze what areas are vulnerable. Specifically, oil facilities in Saudi Arabia and the UAE could become primary objectives for Iranian drones, causing damage with a greater impact than the attack that surprised Saudi Aramco last September – even if Tehran denied the allegation, Western countries have accused the Islamic Republic of being behind the combined drone and missile barrage on Saudis facilities.

Similarly, Israel could see its natural-gas rigs attacked in the Mediterranean Sea, where the country began preliminary pumping of gas just a few days ago to activate an ambitious project whose aim is transforming Israel into an energy exporter.

But infrastructure and shipping security is not the only element that should be included in this framework. Indeed, battles could be waged even in the cyber minefield.

In recent years, Iran has developed its ability to conduct cyberattacks and cyber-espionage, especially against the Saudis. The digitization of the oil and gas industry was essential to face the market’s crisis in 2014, which combined with the adoption of capital discipline strategies would have allowed the identification of solutions to support efficient operations. However, the specific utilization of Internet of Things devices within these companies has also accelerated cyber-physical attacks, which occur when hackers get access to a computer system that operates systems in an oil pipeline, a plant that generates electricity, water systems or a refinery to obtain the control of such equipment in order to damage assets.

Iran may consider this as a valid option to target organizations and gain advantage over nations whose military apparatus is stronger than Tehran’s.

To manage negative events in a timely and coordinated manner, corporate boards play a big role, and a few examples of what they are expected to do are: understand the potential of the crisis and formulate a strategy that must be shared across units; implement communication channels with management and internal stakeholders; navigate the context with the support of external counsel specialized in the kind of threat they are exposed to.

Boards of directors, and other relevant corporate actors, are now required to apply all those theoretical concepts related to crisis prevention and the necessary measures to demonstrate the degree of resilience that the entities they are heading can feasibly achieve.