If the FK had the means to withdraw from Iraq, I am sure they would do so. Before the update, they certainly did. The logistical improbability of supplying and reinforcing a nearly 70 division force, especially through such a vulnerable corridor as the Strait of Hormuz, is pretty high.
If there were some type of naval battle, for example, one that sank a high number of ships in the Strait itself, that would cut off FK access to Iraq.
As such, the defeat of such an army would cause a pretty large drop in Federate morale...as would any failed attempt to take Shiraz. I've learned my lessons from the Central Asian wars, and almost getting destroyed by silver, the most important lesson being that the enemy can't be allowed unrestricted access to your core territories. Hence, the introduction of the E.C.
With the most accomplished corps of engineers on Earth, building world-class fortifications is much easier than it was in the past, especially to defend against a large, albeit undersupplied, but disciplined army that the FK has.
Thanks NK. As you suggested, every aspect of the strategy was taken into account.
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That was a pretty long and boring speech. Someone remind me not to do that again.
EDIT: Iggy, I asked das to invest your economy points into the Balkan Pact logistics. I also reorganized Turkish troops into the multinational force, as long as you approve.
EDIT2: With the exception of the Iraqi Sunnis, most of the other Sunnis in the Islamic world are cooperating with Persia against the greater...uh...challenge of the FK. Examples include Sudan, Turkey, the Afghans, Indian Muslims, Wahhabite Arabs, etc, etc.