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  • Israel Iran Conflict: Tehran confronts Trump with toughest choice yet

    Israel Iran Conflict: Tehran confronts Trump with toughest choice yet

    President Donald Trump faces potentially the hardest choice of his time in the White House, as he weighs up whether the United States should join Israel’s bombing campaign against Iran.

    Trump fueled speculation about a US intervention as he dashed back from a G7 summit in Canada, warning Tuesday that the United States could kill Iran’s supreme leader, but would not “for now.”

    The choice is a monumental one for a president who has vowed throughout both his first and second terms in the Oval Office to get the United States out of its “forever wars” in the Middle East.

    “It’s a major political and military choice that could define his legacy in the Middle East,” Behnam Ben Taleblu, director of the Iran program at the Foundation for Defense of Democracies, told AFP.

    As Trump met his National Security Council in the White House Situation Room on Tuesday, there were already hints that he was considering abandoning what was until recently his preferred diplomatic route.

    The most likely option under consideration by Trump would be the use of giant US “bunker-buster” bombs against Iran’s deeply buried Fordow nuclear facility that Israel’s bombs could not reach.

    US officials said dismantling Iran’s nuclear program — which Western countries say Tehran is using to seek a nuclear weapon — remained Trump’s priority.

    – Fluid situation –

    Trump also implied that the assassination of Ayatollah Ali Khamenei is back on the table, just days after a US official said he had waved off such a move by Israel.

    US officials stressed that Trump had not yet made a decision and was keeping all options on the table, with the situation fluid and changing “hourly.”

    The Axios news site said Trump was even considering a new meeting between his top negotiator Steve Witkoff and Iranian foreign minister Abbas Araghchi.

    A game-changer however would be any Iranian attack on US forces in the region, with an official saying that Trump would not tolerate a “hair on the back of an American” being harmed.

    Trump’s change of tone is remarkable for coming less than a week after the US president — who has openly talked about wanting to win the Nobel Peace Prize — called on Israel to avoid strikes.

    But amid frequent phone calls with Israeli Prime Minister Benjamin Netanyahu, and Netanyahu’s own hints about pursuing regime change in Iran, Trump has pivoted.

    Trump has ordered the USS Nimitz aircraft carrier to the region along with a number of US military aircraft, raising questions about whether he will act.

    – ‘Decisions on your shoulders’ –

    A further hint that action may be on the cards came from the White House’s apparent efforts to see off any backlash from his own Make America Great Again (MAGA) movement.

    There has been growing opposition to any Iran intervention from the isolationist wing of his base, who hold him to his pledge to keep the United States out of wars like those in Iraq and Afghanistan.

    Vice President JD Vance defended his boss, saying Trump had “earned some trust” on the issue and “may decide he needs to take further action to end Iranian (uranium) enrichment.”

    “Having seen this up close and personal, I can assure you that he is only interested in using the American military to accomplish American people’s goals,” the Iraq veteran said, in a nod to MAGA skeptics.

    Trump himself meanwhile hinted at his mood as he mulled his critical decision.

    He reposted a comment by US ambassador to Israel Mike Huckabee, an evangelical Christian, saying God had “spared” Trump from an assassination attempt last year.

    “The decisions on your shoulders I would not want to be made by anyone else. You have many voices speaking to you Sir, but there is only ONE voice that matters. HIS voice,” Huckabee said.

  • 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 says created ‘aerial freedom of action’ from west Iran to Tehran

    Israel says created ‘aerial freedom of action’ from west Iran to Tehran

    The Israeli military said Saturday that its ongoing air campaign in Iran had now given it the required “aerial freedom” for actions from west Iran to Tehran, where 70 fighter jets carried out strikes overnight.

    “We have created aerial freedom of action from west Iran all the way to Tehran… Tehran is no longer immune,” military spokesman Brigadier General Effie Defrin told journalists, adding that the air force “launched a massive strike involving more than 70 fighter jets, targeting objectives in Tehran” overnight.