Tensions between the two historical Middle Eastern rivals rose after the United States withdrew its military forces from the region in 2013, leaving a power vacuum that prompted an arms race between Iran and Saudi Arabia by the following year, in which the Saudis purchased 91 U.S.-produced M1A1 Abrams main battles tanks, which Iran denounced as a "hostile move". The governments of both emerging superpowers began to simultaneously increase the size of their militaries; this included the development and testing of ballistic missile systems on both sides, culminating in the two countries obtaining similar thermonuclear weapons seven months later, with Saudi Arabia's successful test yielding 13.5 megatons.
Furthermore, Iran and Saudi Arabia took advantage of Iraq, which had descended into civil strife between its ethnic Sunni and Shiite population after the Iraqi government collapsed in July 2015, leading to internal unrest and a number of ethnic and religious conflicts. Saudi Arabia moved into southern Iraq to protect the Sunni Muslim refugees in the provinces, while Iran protected the Shiites, allied itself with the Kurds (allowing them to manage the Kurdish regions of northern Iraq), and openly supported the formation of a Kurdish state, bringing the latter into direct conflict with Turkey, another close ally of the West. This essentially set the path to war between Saudi Arabia and Iran, and their respective allies.
After declaring an "alliance" with southern Iraq around August 2015, and a coalition with Syria, Jordan, Egypt and Turkey, all predominantly Sunni Muslim countries, which some "ignorantly designated" as the "Arab Holy Alliance", Saudi Arabia strove to stabilize and guide the shaky nation of Iraq with American support. This, however, led to Iran calling the coalition an "unacceptable Saudi intervention" and accusing Saudi Arabia of attempting to turn Iraq into a "client state". Swearing its intent to defend Iraq from colonization by a "corrupt group of thieves" in June 2016, Iran, supported by its Kurdish allies and the resurgent Afghani Taliban, started the war by launching its first incursions, taking Kirkuk and Arbil, two cities in northern Iraq, in the same day, and making bombing runs on key targets on Iraq's southern border, including a power station and a bridge.
Talks to end the war, with the United Nations likely playing a critical role, stalemated multiple times in 2015, and as a result, hundreds of oil wells and pipelines in the region were damaged or destroyed, burning uncontrollably, and as the war escalated in September, gas prices in the U.S. sky rocketed to nearly $13, and to $20 from 2017 to 2025. Saudi Arabia seemed to be the most badly hit by the war at this time, with Iran's other opponents, Syria, Jordan, Israel, Qatar, and southern Iraq, along with Lebanon, also being shown under heavy conflict; compared to its enemies, Iran seemed to have been at least initially largely unscathed. Despite America's worsening internal situations and economic crisis, the United States military took part in the war to some limited degree, as Connor Morgan (a former soldier in the U.S. military) was stated to be a veteran of the Oil Wars.
It is unknown what the ultimate outcome of the Oil Wars is, though due to America's fall and the rise of a Korea closely aligned with Iran (with the Islamic Republic providing the GKR weapons and fuel at reduced rates by 2018 and praising Korea's occupation of Japan) the odds are unlikely to have been in Arabia's favor.
The war had palpable lasting effects, most notably the severe depletion of oil resources, causing the emergence of black markets along America's East Coast dealing in illicit trade of such resources, and the disruption in global energy supplies, which even causing New Yorkers to grow gardens on balconies and rooftops in an attempt to grow more food in 2017. The shortage of oil proved to be so severe that massive cargo carriers found at any large port in the world by 2022 were reduced to "relics of the Age of Oil", providing a flexible means of transportation for the GKR Army.
The Persian Gulf region's ongoing instability contributed significantly to the decline of the world economy itself, and was one of the major factors further worsening the domestic situations of Western nations, along with a strike in Venezuela, Nigeria's civil wars, China's economic collapse, and Russia and Ukraine refusing to trade oil and natural gas with the European Union.
While the Iranian Coalition was still in existence by October 2020 and continued to occupy northern Iraq, open warfare between the two nations seems to have largely abated at this point. The Coalition was possibly allied with Oman (traditionally a close ally of Iran) as they coordinated with ISS in identifying insurgents. They were also closely allied with the Greater Korean Republic as they invited KPA Special Forces to eliminate insurgent bases in Iraq. The Coalition alongside Korea may have also performed anti-terrorist operations in Afghanistan. However, it is also improbable that the GKR has openly engaged in hostility against Iran's enemies, due to its repeated attempts to bolster its image in the eyes of the international community.
- According to the Backstory video trailer of Homefront, many oil wells and pipelines in close proximity to the Islamic holy cities of Mecca and Medina were damaged by attacks from Iran. However, Iran seems to have remained an Islamic Republic even throughout the conflict, as implied by statements of its renowned Muslim Cleric Ahmad Jannati, making it unclear how it and the rest of the Muslim world justified multiple nuclear assaults upon the holy land of Islam.
- The regime of Syria has historically affiliated itself with Shi'a Iran, but in the game chose to align itself with its Arab neighbors instead, possibly due to rise in Arab nationalism. Also, it is uncertain whether or not the regional Arab League supported Saudi Arabia and its allies or not, and if so, such support, along with that of the West, was unable to break the continual deadlock with Iran and the Taliban over the fractured Iraq.
- ↑ Iran accuses Saudi Arabia of escalating arms race in Middle East
- ↑ Iran, Saudi Arabia test nuclear weapons
- ↑ Iraq: A Nation Divided
- ↑ Homefront Video: The Bobb Rogers Radio Show
- ↑ Homefront: The Voice of Freedom
- ↑ 6.0 6.1 An already unstable Iraq implodes with violence
- ↑ American gas prices rise to record highs as Great Arab War escalates
- ↑ 
- ↑ International reactions to Korean occupation of Japan differ
- ↑ Rooftop gardens a way of life for some urbanites
- ↑ East coast black markets light up
- ↑ Cargo carriers find new life in Korean Military
- ↑ Korean Officials provide details of Iraq Operations
- ↑ GKR Peacekeeping mission in Nigeria a success