Iran edges closer to a revolution that would reshape the world

As protesters pour into the streets of Iran night after night, leaders across the region and around the world are grappling with the possibility that the Islamic Republic could be overthrown — a seminal event that would transform global geopolitics and energy markets.

The regime of Supreme Leader Ayatollah Ali Khamenei has weathered bouts of protests many times, but demonstrations that began two weeks ago are spreading — by some accounts, hundreds of thousands of people defied authorities’ threats and a brutal crackdown to take to the streets over the weekend, from the capital Tehran to dozens of other cities across the nation of 90 million. They are being cheered on by President Donald Trump, fresh off the capture of Venezuela’s Nicolas Maduro, and the US leader has in recent days repeatedly threatened to strike Iran, suggesting that America is back in the regime change business.

World leaders and investors are watching closely. US commanders have briefed Trump on options for military strikes, according to a White House official. Brent crude surged more than 5% on Thursday and Friday to over $63 a barrel as investors priced in the possibility of supply disruptions in OPEC’s fourth-biggest producer.

“This is the biggest moment in Iran since 1979,” said William Usher, a former senior Middle East analyst at the Central Intelligence Agency, referring to the revolution that birthed the Islamic Republic, upended the balance of power in the region and led to decades of rancor between Tehran and the US and its allies. “The regime is in a very tough spot right now and the primary driver is the economy. I think they have a narrowing window to reassert control and a diminished toolset to do it.”

More than 500 protesters have been killed in the past two weeks, according to the AP, citing the US-based Human Rights Activists News Agency, and more than 10,000 have been arrested in demonstrations triggered by a currency crisis and economic collapse, but now also focused on the regime.

Authorities have tried to block the internet and telephone networks since Thursday, as they seek to quell Iranians’ growing outrage over government corruption, economic mismanagement and repression. Foreign airlines have canceled flights to the country.

Trump’s repeated warnings to Iran that the US will strike if it kills peaceful protesters come as the president escalates his assault on the post-World War II global order in a stunning assertion of American power that’s included claiming Venezuela’s oil after seizing Maduro, and threatening to take over Greenland from NATO ally Denmark.

Israel, which battered Iran during a US-assisted 12-day air war in June, is liaising closely with European governments about the situation on the ground, according to a senior European official, who asked not to be named discussing private talks. 

If the regime does fall, it would be a blow to Russian President Vladimir Putin, who would lose another foreign ally after Maduro this month and the overthrow of Syria’s Bashar al-Assad just over a year ago, the official added.

The stakes for oil traders are significant. But it’s unclear if Khuzestan, the main oil-pumping province, has seen unrest and so far there are no signs of reduced crude exports. On Saturday, Reza Pahlavi, the son of the former shah who’s exiled in the US and positioning himself as an opposition leader, urged petroleum workers to strike. Oil strikes in 1978 were one of the death knells of his father’s monarchy because of how they immediately hit the economy.

The market’s “focus has now shifted to Iran,” said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management, which helps clients manage volatility in energy markets. “There is also growing concern in the market that the US, with Trump at the helm, could exploit the chaos to attempt to overthrow the regime, as we have seen in Venezuela.”

The White House is on a high after the tactical success of the operation against Maduro, as well as Trump’s decision to bomb Iranian nuclear facilities at the end of the 12-day war. American officials are also increasing pressure on Denmark to cede control of Greenland, signaling the administration has the appetite for more forays abroad.

Read More: Trump’s Ousting of Maduro Shows His New World Order Is Here

Trump may well be tempted, for all the risks, to try to topple a government that’s been an archenemy to the US and Israel for over 45 years. 

“The balance of power would change dramatically,” Mark Mobius, the veteran emerging markets investor, said of the downfall of the Islamic Republic. “The best outcome would be a complete change in the government. The worst outcome would be continued internal conflict and a continuing rule by the current regime.”

Trump at times ran against American adventurism in the region, where the ousting of longtime US enemy Saddam Hussein in Iraq unleashed a generation of chaos and terrorism, costing hundreds of thousands of lives and trillions of dollars.

It’s just that kind of potential power vacuum that’s worrying Arab leaders in the Gulf Cooperation Council, according to regional officials. While the group — which includes Saudi Arabia, the United Arab Emirates and Qatar — has often viewed Iran as an adversary, its members have sought to improve ties in recent years to ensure Tehran doesn’t lash out against any Israeli or US military action by attacking them. The specter of the Arab Spring, where dictators fell across the region only for chaos to follow, looms large.

Iran has warned that if it’s attacked, American assets in the region — where it has deep commercial ties and tens of thousands of troops stationed — and Israel will be “legitimate targets for us.”

Read More: How Sanctions and a Currency Crash Fueled Iran Unrest

The Islamic Republic has been severely weakened in the past two years, thanks to its stagnating economy, rampant inflation and Israel striking both it and its proxies. But it retains a large and sophisticated arsenal of ballistic missiles able to hit targets across the Middle East, from military bases to oil installations, and the regime still has the backing of the country’s myriad security forces, including the all-important Islamic Revolutionary Guard Corps.

For the GCC and the likes of Turkey and Pakistan, the worst outcome would be chaos in Iran, said Ellie Geranmayeh, deputy program director for the Middle East and North Africa at the European Council on Foreign Relations. It’s an eventuality made more possible by the sheer diversity of Iranian protesters, who include everyone from urban, secular elites to religious conservatives and lack a unifying leader.

“With the GCC reconciliation of the past few years with Tehran, there’s a sense of better the devil you know rather than complete chaos or an unknown power structure that is alien to them,” said Geranmayeh.

US and Israeli strikes might even strengthen the government and reduce the appeal of the protest movement. In June, there was a surge in nationalism as the Jewish state and Washington rained down bombs.

The Islamic Republic probably won’t survive in its current form by the end of 2026, according to Dina Esfandiary, a Middle East analyst at Bloomberg Economics. The most likely scenario, she said, is a leadership reshuffle that largely preserves the system or a coup by the IRGC, which could mean greater social freedom — the organization is run by generals rather than clerics — but less political liberty and a more militaristic foreign policy.

The chances of a revolution are still fairly low, she said.

“A collapse appears unlikely for now,” she said. “Iranians are frightened of chaos, having seen it wreak havoc in neighboring Iraq and Syria. More importantly, the government is cracking down hard.”

On Sunday, President Masoud Pezeshkian, a former heart surgeon and a moderate relative to others at the top of the Iranian government, struck a conciliatory note, offering condolences to families affected by the “tragic consequences.”

“Let’s sit down together, hand in hand, and solve the problems,” he said on state TV.

It’s unlikely many protesters will believe him. The supreme leader, a much more powerful figure, as well as members of the security forces, are increasingly bellicose, floating the death penalty and making clear they’re prepared to respond as they always have — with brutal force.

“I don’t think a collapse of the regime would be pretty,” said Usher, the former CIA analyst. “Short-term, I could imagine some fracturing of the country as ethnic minority groups and some provinces pursue autonomy from Tehran. The IRGC will fight vigorously to save the regime so I think there’d be strong possibility for large-scale violence.”

This story was originally featured on Fortune.com