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Tag: Israel-Iran conflict

  • US and Israel launch attack on Iran

    US and Israel launch attack on Iran

    US President Donald Trump has confirmed the US has launched “major combat operations” in Iran.

    This comes after Israeli Defence Minister Israel Katz says his country has launched a “pre-emptive” attack on Iran.

    “Our objective is ‌to defend ‌the ​American people by eliminating imminent threats ​from the Iranian ⁠regime,” ​Trump said.

    Witnesses say they heard explosions in Tehran, Iran’s capital, and saw thick smoke rising in the sky.

    Israel has announced a state of emergency in Israel in anticipation of retaliatory strikes.

    Meanwhile, U.S. embassies in Qatar and Bahrain said their personnel are sheltering in place and advised all Americans in the region to do the same after the joint attack early Saturday morning.

    The alerts advised U.S. citizens to find a secure location within their residence or another safe building, along with a supply of food, water, medication and other essential items.

    They should also avoid demonstrations, keep a low profile and be aware of their surroundings, the embassies said. The security alerts went out minutes after Israel confirmed it had attacked Tehran.

    The U.S. Embassy in Israel had already authorized departure for non-essential personnel and their families on Friday.

    DEVELOPING

  • How the Israel-Iran conflict could affect energy prices

    How the Israel-Iran conflict could affect energy prices

    Israel’s strikes on Iran, and Iran’s response, initially caused an shudder on global financial markets.

    The price of oil in particular surged, but after a weekend of missile and drone strikes between the two countries the cost of crude has fallen back.

    Nevertheless, oil prices are $10 higher than they were a month ago and there are renewed fears increased energy costs could make everything – from petrol and food to holidays – becoming more expensive.

    That is what happened after Russia invaded Ukraine three years ago, affecting people’s lives around the globe.

    How much have oil prices risen?

    The attacks prompted an instant reaction on the markets.

    Brent Crude – the main international benchmark – rose to over $78 a barrel on Friday. Since then, it has fallen back to about $74.50, but it is still $10 higher than it was this time last month.

    The price of oil rises and falls all the time in response to big geopolitical events, and the state of the global economy, so it is not a surprise to see oil prices reacting to the Israel-Iran conflict.

    However, the price is far below where it was a year earlier. It is also well below the peaks seen in 2022 following Russia’s invasion of Ukraine, when it spiked to nearly $130 a barrel.

    So will petrol and other prices go up?

    When the wholesale oil price goes up, many people notice it first when it leads to higher petrol prices.

    But more expensive energy also feeds through to higher prices for almost everything, from farming to manufacturing.

    When it comes to food, higher energy costs can lead to higher prices on the shelf in many ways. It can make it more expensive to run farm machinery, to transport produce, and to process and package food.

    However, that will only happen if energy prices stay high for a sustained period.

    Even with petrol and diesel, rising crude prices only have a limited impact.

    “A rough rule of thumb is a $10 rise in the oil price would add about 7p to the price at the pump,” says David Oxley at Capital Economics.

    However, this is not just an oil story, he cautions.

    Many will remember the shock to prices that followed the beginning of the Ukraine conflict. That was in large part a response to higher gas prices, Mr Oxley says.

    Many of us heat our homes with gas, and in the UK electricity prices are also set in relation to the gas price.

    Gas prices have also risen after last week’s attacks. But the impact will feed through to households only slowly, if at all, says Mr Oxley, given the way the market works, including the role of the regulator, in capping prices.

    Could oil prices rise higher?

    The current situation is “very significant and concerning”, says Richard Bronze head of geopolitics at consultancy and research firm Energy Aspects.

    But that doesn’t mean it will turn out to have as big an impact as the Ukraine conflict, or even previous troubles in the Middle East.

    The main questions are how long Israel and Iran remain locked in this conflict, whether other countries in the region are drawn in, and whether the US steps in to de-escalate the situation.

    Above all it depends on whether we see actual disruption to shipping in the Strait of Hormuz, the waterway off Iran’s southern coast, which is the route to global markets for about a fifth of the world’s oil production.

    “It’s a narrow choke point so it is a significant weak spot for global oil markets,” says Mr Bronze.

    That remains an unlikely scenario, but Iran has threatened it in the past and it is now marginally more likely than it was just a few days ago. And that outside risk is part of what is driving up prices, he says.

    Without interruption to shipping, oil prices are not likely to stay high.

    In 2022, following Russia’s invasion of Ukraine, there was growing demand for energy as the global economy reopened after Covid.

    Now the global economy is facing tougher times, and oil producers from Saudi Arabia to Brazil have the capacity to increase oil supply which would help lower prices.

    What does it mean for the global economy?

    The scale of any energy price rises, and the wider impact, will depend on the magnitude of what comes next in the conflict between Israel and Iran.

    But it does have the potential to be “a bad shock for the global economy at a bad time” says Mohammed El-Erian, chief economic adviser at asset manager Allianz.

    “Whichever way you look at it, it’s negative short-term, it’s negative longer-term.

    “It’s another shock to the stability of the US-led global economic order at a time when there were already a lot of questions.”

    Capital Economics calculates that if oil prices were to return to over $100 a barrel that could add 1% to inflation in advanced economies, making life difficult for central banks hoping to bring down interest rates.

    But that’s not the most likely scenario in David Oxley’s view.

    “Instability in the Middle East is nothing new, we’ve seen numerous bouts of it,” he says. “In a week’s time it might have all blown over.”

  • Israel-Iran conflict: latest developments

    Israel-Iran conflict: latest developments

    Israel and Iran traded fire for a third straight day on Sunday, with rising casualties and expanding targets marking a sharp escalation in the conflict between the longtime adversaries.

    Overnight Iranian strikes killed at least ten people in Israel, adding to the growing toll in both countries since Friday when Israel launched a massive wave of attacks targeting Iranian nuclear and military facilities, sparking retaliation.

    The exchange of strikes is the first time the arch-enemies have traded fire with such intensity, triggering fears of a prolonged conflict that could engulf the Middle East, even as international leaders urge de-escalation.

    Here are the latest developments:

    – Deadly Iranian strikes –

    Iran unleashed deadly barrages of missiles at Israel overnight Saturday into Sunday, killing at least ten people, including children, and wounding around 200, according to Israeli emergency services.

    Air raid sirens and booms rang out in Jerusalem and Tel Aviv early Sunday as Israel’s military said millions of Israelis were “running for shelter as sirens sound” in dozens of cities and communities around the country.

    The first wave of Israeli strikes on Iran killed 78 people and wounded 320, according to Iran’s ambassador to the United Nations, but Iranian authorities had not provided an updated toll as of early Sunday.

    Iran also struck sites used by Israeli warplanes for refuelling, the Revolutionary Guards said early Sunday.

    Israel said it had also intercepted seven drones launched towards its territory, as it worked to head off attacks while carrying out further strikes on Iran.

    Yemen’s Iran-backed Huthi rebels on Sunday said they had launched several missiles at Israel.

    – Israel expands targets –

    After targeting Iranian military and nuclear facilities, including killing top brass and scientists, Israel expanded targets to air defences and oil infrastructure.

    Israeli strikes hit two fuel depots in Tehran, the Iranian oil ministry said Sunday, with AFP journalists reporting seeing fire at the oil depots in Shahran northwest of the Iranian capital.

    On Saturday, Israel’s military said it was attacking dozens of missile launchers in Iran after announcing it had targeted air defences with a wave of strikes in the Tehran area.

    Iranian news agency Tasnim reported early Sunday that an Israeli strike had also targeted the country’s defence ministry headquarters in Tehran and damaged one of its buildings. The defence ministry did not comment.

    – Faltering nuclear diplomacy –

    Iranian Foreign Minister Abbas Araghchi said Sunday that Israel had “crossed a new red line” by targeting Iran’s nuclear sites, after Tehran on Saturday had pledged to limit its cooperation with the UN’s nuclear watchdog, criticising it for its silence over Israeli strikes.

    “It is entirely clear that the Israeli regime does not want any agreement on the nuclear issue. It does not want negotiations and does not seek diplomacy,” Araghchi told foreign diplomats, saying the attack launched on Friday was an “attempt to undermine diplomacy and derail negotiations”.

    The fiercest ever exchange of fire between the arch foes came amid ongoing talks between Tehran and Washington seeking to reach a deal on Iran’s nuclear programme.

    Before the Israeli strikes, the two sides had been set to hold a sixth round of negotiations in Oman on Sunday.

    Iranian President Masoud Pezeshkian said Saturday that Tehran would not attend nuclear talks with the United States so long as Israel kept up its attacks on the Islamic republic.

    Western governments have repeatedly accused Iran of seeking a nuclear weapon, which it denies.

    – International unease –

    Others states have urged restraint and warned against a larger conflict.

    US President Donald Trump said he and Russian President Vladimir Putin had agreed in a phone call on Saturday that the conflict between Iran and Israel “should end.”

    But on Sunday morning, Trump issued a warning to Iran saying it would experience “the full strength” of the US military if it attacks the United States, reiterating that Washington “had nothing to do” with Israel’s strikes on Tehran’s nuclear and intelligence facilities.

    Iraq — a close ally of Tehran, but also a strategic partner of Iran’s arch-foe the United States — has approached the Iranian and US governments in a bid to prevent being caught up in a regional escalation.

  • Global oil prices soar after Israel attacks Iran

    Global oil prices soar after Israel attacks Iran

    Global oil prices have jumped after Israel said it had struck Iran, in a dramatic escalation of tensions in the Middle East.

    The price of the benchmark Brent Crude was up by more than 10% shortly after the news emerged, reaching its highest level since January.

    Traders are concerned that a conflict between Iran and Israel could disrupt supplies coming from the energy-rich region.

    The cost of crude oil affects everything from how much it costs to fill up your car to the price of food at the supermarket.

    As trading began in Europe, prices had eased a little, around 5% higher than Thursday’s closing price. London-traded Brent crude was $72.8o a barrel, while oil traded on the US’s Nymex was at $73.20.

    Share prices also fell across Asia and Europe on Friday. The UK’s FTSE 100 index opened down 0.6%.

    So-called “safe haven” assets such as gold and the Swiss franc have also made gains.

    Some investors see these assets as more reliable investments in times of uncertainty.

    Following Israel’s attack, Israeli Defence Forces (IDF) said Iran had launched around 100 drones towards the country.

    Analysts have told the BBC that energy traders will now be watching how much the conflict worsens in the coming days.

    “It’s an explosive situation, albeit one that could be defused quickly as we saw in April and October last year, when Israel and Iran struck each other directly,” Vandana Hari of Vanda Insights told the BBC.

    “It could also spiral out into a bigger war that disrupts Mideast oil supply,” she added.

    In an extreme scenario, Iran could disrupt supplies of millions of barrels of oil a day if it targets infrastructure or shipping in the Strait of Hormuz.

    The strait is one of the world’s most important shipping routes, with about a fifth of the world’s oil passing through it.

    At any one time, there are several dozen tankers on their way to the Strait of Hormuz, or leaving it, as major oil and gas producers in the Middle East and their customers transport energy from the region.

    Bounded to the north by Iran and to the south by Oman and the United Arab Emirates (UAE), the Strait of Hormuz connects the Gulf with the Arabian Sea.

    “What we see now is very initial risk-on reaction. But over the next day or two, the market will need to factor in where this could escalate to,” Saul Kavonic, head of energy research at MST Financial said.