As fears grow over Tehran’s involvement in the Israel-Gaza conflict, the Biden administration has sent a clear message to the Iranian regime: exercise caution.
A Hamas spokesperson told the BBC it had received support from its ally Iran for the unprecedented attacks on Israeli civilians.
And another report in the Wall Street Journal quoted unnamed members of Hamas and the Lebanese guerrilla movement Hezbollah as saying that Iran had given the green light to the attack more than a week ago.
While Iranian leaders have celebrated and praised the attacks on Israeli citizens, the Iranian Foreign Ministry has downplayed its role, saying that “accusations related to the Iranian role… are based on political reasons.”
But the Biden administration noted that although the United States so far has no intelligence or evidence indicating direct Iranian participation, Iran is complicit in the attacks.
White House national security spokesman John Kirby told US media this week: “Iran has a long history of supporting Hamas and other terrorist networks throughout the region by providing them with resources and training capabilities. And so, in that regard, it’s clear that Iran is complicit here.”
Could this mean American retaliation against Tehran?
In a meeting with a roundtable of Jewish leaders at the White House this week, US President Joe Biden discussed deploying US military ships and aircraft closer to Israel.
Washington has already pledged continued support to Israel and sent its top diplomat, Antony Blinken, to the region in a bid to avoid a wider war in the Middle East.
Loreen Gilbert, CEO of WealthWise Financial Services, warned earlier this week that the potential for market disruption was high.
“It’s when and if this conflict becomes a broader, multi-nation, multi-country conflict, which certainly has the potential to derail markets,” she said.
Mark Dubowitz, executive director of the think tank Foundation for Defense of Democracies, a Washington-based lobbying organization, suggests that Hamas has long relied on Iranian technology and logistical support to produce weapons, such as rockets. and armed drones.
And he added that while the regime unleashed wars in Syria, Lebanon, Yemen and Iraq, Iranian Supreme Leader Ali Khamenei and his Islamic Revolutionary Guard Corps (IRGC) had returned to their primary goal: destruction of Israel.
“Make no mistake, the prospects of a larger regional war are increasing,” he said.
Iranian oil exports could suffer
As Iran is accused of supporting and financing terrorism, there has been a marked increase in the number of Iranians protesting the regime in hundreds of Iranian cities, and many want the United States to take action firmer.
Iranians risked their lives for freedom after the death in custody of Mahsa Jina Amini more than a year ago, which sparked the global “Women, Freedom of Life” movement and calls for regime change.
But commentators warn that if the war spreads further and Washington imposes tougher restrictions, Iran’s oil production could come under pressure.
Iran is an OPEC oil-producing country and its exports have increased in recent years, filling a void left after Russia’s invasion of Ukraine and, some say, a softer approach to sanctions under the Biden administration.
Some analysts estimate Iran’s crude production at more than 3 million barrels per day and its exports at more than 2 million barrels per day – the highest levels since the Trump administration withdrew the United States from Iran nuclear deal in 2018, according to the Wall Street Journal.
Sales fell to around 400,000 barrels per day in 2020 as the United States reimposed sanctions.
Then there are accusations that the Iranian regime profits from illicit oil sales.
While it is difficult to know exactly how much revenue the regime earns from black market sales, “Iran generated approximately $80 billion in revenue from oil sales under the Biden administration,” according to Claire Jungman, chief of staff of United Against a Nuclear Iran. an NGO and monitoring group that closely tracks illegal oil exports and Tehran’s tanker arsenal.
She suggests that a substantial portion of this oil is shipped to China, and that the oil surplus has not only propped up the regime, “but also significantly strengthened its proxies” such as Hamas in Gaza and Hezbollah in Lebanon. .
“Iran remains a big wild card”
There is also a risk, some analysts say, that Iran itself will disrupt the flow of oil through the Strait of Hormuz.
This essential waterway separates the Persian Gulf from the Arabian Sea and around 20 percent of the world’s oil is shipped there.
Helima Croft, head of global commodities strategy at RBC Capital Markets, said “Iran remains a very big wild card.”
“We will monitor how forcefully (Israeli) Prime Minister Netanyahu accuses Tehran of facilitating these attacks by providing Hamas with weapons and logistical support,” she said earlier this week.
Hedge fund manager Pierre Andurand, one of the world’s top energy traders, said in a social media post that what is happening in Iran is being closely watched by market participants.
“As Iran is also behind Hamas attacks against Israel, there is a good chance that the US administration will begin to more strictly enforce these sanctions on Iranian oil exports,” he wrote.
“This would further tighten the oil market. Moreover, the probability that this would lead to a direct conflict with Iran is not zero.”
Will Saudi Arabia intervene to guarantee oil production?
If Iran’s oil supply is reduced, the key question is whether Saudi Arabia will help make up the deficit.
It is a key producer that is part of the OPEC oil-producing countries and which earlier this year cut its production by 1 million barrels per day.
It is worth noting that public comments made so far by the Saudis suggest that they may be prepared to increase production if necessary.
This week, Iranian President Ebrahim Raisi and Saudi Crown Prince Mohammed bin Salman discussed the conflict in the first phone call between the two leaders since a China-brokered deal between Tehran and Riyadh to restore relations.
The Saudi crown prince “affirmed that the Kingdom was making all possible efforts to communicate with all international and regional parties to put an end to the ongoing escalation,” the official Saudi news agency SPA said.
David Bassanese, chief economist at Betashares, said he expects the Saudis to step in to boost oil supplies if necessary.
The consequences for the economy would be disastrous if this were not the case, he said.
“If sanctions against Iran are tightened and there is no other alternative supply via countries like Saudi Arabia, oil prices could easily reach $100 (a barrel),” he said. he declared.
“It will increase inflationary pressure globally, it will increase pressure on central banks to continue to raise interest rates and increase the risk of a global recession.”
If tensions in the region continue to escalate, we could find ourselves in a prolonged period of economic uncertainty.
– with wires