Heightened Cyber Risk: How Escalating Tensions with Iran Could Impact Cybersecurity

July 09, 2025

The rising tensions between the United States and Iran marked by the most recent Iranian strikes against U.S. interests in Qatar has drastically increased security issues across the country. Cybersecurity leaders across the U.S. public sector must be prepared for the digital fallout.

Iran is one of the world’s most sophisticated cyber actors, ranked among the Big Four threat actors alongside China, Russia and North Korea. In times of geopolitical instability like these, Iran turns to cyber operations as a strategic tool of retaliation, disruption and psychological warfare.

Iran's Cyber Doctrine: Asymmetry by Design

Woven into its national security strategy, Iran’s cyber capability is embedded across key organizations such as the Ministry of Intelligence and Security (MOIS), the Islamic Revolutionary Guard Corps (IRGC) and a range of state-affiliated hacker groups. This cyber force has matured significantly over the past decade, driven by a belief that digital operations offer a cost-effective and globally scalable means to counterbalance Iran’s conventional military disadvantages.

Iranian cyber actors have executed attacks targeting government networks, industrial control systems, financial institutions and critical infrastructure. Iran has capabilities to disrupt physical systems and access operational technology (OT). A stark example of this is the infiltration of control system of the Rye Brook dam in New York in 2013. More recently, in 2023, Iranian hackers attacked Israeli water system PLCs, which signaled growing interest in internet of things (IoT)-enabled infrastructure threats.

The implications of these attacks for the U.S. public sector organizations – federal, state and local are clear: cyber assets are now strategic targets. Iran has a documented pattern of launching tit-for-tat cyber campaigns in retaliation for such military sanctions and strikes. These campaigns include distributed denial-of-service (DDoS) attacks against more than 50 U.S. banks from 2011 to 2013, data breach and ransomware campaigns and disinformation operations aimed at creating political and social chaos.

Targeting the Public Sector: Retaliation and Influence Operations

Considering the role of the federal government in shaping foreign policy, it sits at the center of Iran’s cyber crosshairs during periods of extreme conflicts. Destructive cyber campaigns could also impact and disrupt agencies involved in education, public health, defense, transportation or energy. Iran’s tactics range from subtle disinformation efforts to ransomware attacks intended to wreck public trust or amplify social division.

These threats are not just theoretical. In recent times, Iranian hackers have been linked to cyber-enabled disinformation campaigns targeting U.S. elections and public opinion. According to the 2020 Justice Department charges, there were coordinated attempts to spread fake narratives and intimidate voters through manipulated social media content and spoofed emails. As per national security reports and media investigations, similar operations are ongoing today.

Owing to the current situation, it is likely that public sector entities, especially those having weak cybersecurity measures in place for internet-facing assets, could be the key targets or access points for economic and psychological disruption. Earlier this month, Iran-led threat actors hacked into a kindergarten’s public announcement system in Israel, underscoring Iran’s intent to provoke fear and disturb civilian life.

Private Sector in the Crossfire

While government establishments are prime targets, the private sector is by no means immune to cyberattacks. Organizations in financial services, healthcare, media, energy and defense sectors, especially those with federal involvement are all within scope.

Attacks like the breach of Las Vegas Sands, in response for public comments made by the company’s CEO in 2014 shows that corporate speech alone can prompt Iranian cyber retaliation. Similarly, ransomware attacks by Iranian actors – like those recently charged by the DOJ continue to strain commercial cybersecurity defenses, leading to lack of resources for small and medium-sized businesses to respond effectively.

Most recently, in March 2025, a botnet linked to Iran launched DDoS attacks against global telecom providers and online gaming platforms, demonstrating the wide-reaching and often aimless scope of these campaigns.

Staying Vigilant in an Uncertain Time

With Iran’s cyber defense capabilities fully integrated into its geopolitical playbook, U.S. organizations must treat cybersecurity as not just an IT concern, but as an imperative for national security. The Department of Homeland Security has issued an advisory bulletin warning that “state-sponsored actors and pro-Iranian hacktivists may conduct attacks against U.S. networks, particularly those with weak defenses or unpatched security systems”.

The U.S. is undergoing a complex, multidomain conflict and the cyberspace is one of the frontlines. Now is the time for organizations to monitor for misinformation campaigns, reassess cyber hygiene, patch known vulnerabilities and train employees to tackle social engineering threats and phishing attacks. Just as importantly, organizations should be cautious with the information they share online, especially government and public sector leaders and workers.

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