Israel-Iran War Packs Major Oil Blow
There is nothing like a hot war to inflame oil prices.
Having written that this war is not WWIII, that doesn’t mean I think it will be inconsequential or harmless to the US or to Israel. All wars can be and usually are very harmful. What I meant is that it is not inherently going to be the long-feared pan-Arab-Israeli war that people believed any war between Israel and Iran would quickly turn into. As I laid out, Iran has no allies left with the stamina to take on such a fight or with the desire to support Iran in such a conflict against Israel. It’s already clear that you don’t see Islamic nations rushing to Iran’s defense. There is a stunning silence, instead.
Now, having said that, the potential exists for ANY war to escalate into WWIII if people do dumb enough things. For example, while Pakistan is so far staying out of this war, it has said that, if Israel uses any of its nuclear weapons in Iran, then it will launch one of its own nuclear missiles at a major Israeli city. Its own MAD policy (Mutually Assured Destruction) to try to keep Israel from going nuclear. The risks of nuclear powers doing stupid things is always present in the modern world, and the more chaotic things become, the more the risks of “accidents” multiply.
That’s one reason that we certainly don’t want to allow yet another, often-rogue nation, to ever get nuclear weapons. The more those weapons proliferate into unstable nations, the more the risks continually multiply of some lunatic like Kim Jun Un deciding it’s time to use one of his. He probably won’t do that, but with a nut like him, who knows? We can never say THAT kind of start to WWIII will not happen because it can happen at any time, even without a war between Israel and Iran.
Likewise, if Israel did something really stupid to turn this into the kind of Holy War that Israel does not want—the kind that it shows it seeks to avoid by policing some of its own most radical people away from the Temple Mount during Passover each year, so they don’t install their temple cornerstones in the face of the Dome of the Rock—if it does something that dumb, such as accidentally blows up a favorite Muslim mosque in Iran, then, yes, it could become WWIII. Israel always has the capacity to start a “holy war” or “jihad” if it gets too arrogant and does something really dumb; but knocking out nuclear facilities isn’t going to start jihad on Iran’s behalf in today’s world of Iran’s decimated allies. That would take Israel doing something religiously supremely offensive that demands a religious war in response.
My claim was that, so long as Israel keeps this war solely about permanently ending Iran’s nuclear production, then it’s not likely to be WWIII. The days when that was the almost inevitable outcome of any war between Israel and Iran are over. Iran’s allies have been largely neutered over the past decade and especially over the past year, and they are not itching for more war with Israel than they already have and already cannot handle more wars outside of Ukraine than they already have or new opportunities for a giant war that would be more important to them than the South China Sea or Taiwan. Iran’s allies have other ambitions, and defending Iran’s nuclear production plans does not place high enough for them to get involved in a war against Israel at this time. And the proof of that is already showing in their continued resounding silence.
So, the pan-Arab war or the pan-Muslim war with Israel or the Iran-China-North-Korean-Russian axis forming an alliance against Israel to save Iran’s military and nuclear facilities doesn’t come into play here unless, of course, Israel or the US do something more arrogant than taking out Iran’s nuclear program, such as attempting regime change. The possibility of people doing stupid things that escalate any war in the Middle East into that kind of war always exists. It exists even without a hot war raging in the region. It exists just from Kim Jung Un waking up after going on a bad bender and getting off his meds to decide one morning that this is the day to nuke Honolulu or Tokyo.
At one time, this war would have inevitably been WWIII. Not inevitable anymore, but the possibility of people doing stupid things to ratchet it up over the months or years ahead if it turns into another Iraq-style, regime-change, American-adventure-in-nation-building, Cheneyesque quagmire—always exists. Donald Trump said this isn’t going to be about regime change; yet’s he’s also already said that what must happen now is unconditional surrender by the Ayatollah. How does “unconditional surrender” not wind up meaning the Ayatollah gets deposed? So, the Ayatollah has said that will never happen. Let’s hope Trump doesn't turn this into another regime-change war like those that Bush was fond of starting because, once it becomes that kind of quagmire, who knows what it will devolve into?
The damage is already happening for the US
For now, the repercussions are already formidable without being the apocalyptic nuclear holocaust that everyone has in mind when they talk about WWIII. For now, it means oil prices have shot through the roof, and crude could rapidly go to three-digit figures, pushing inflation way back up, since crude was the one anchor holding overall inflation down. Add to that the inflation coming from tariffs, and we could see a scorching-hot inflation conflagration, especially if Fed Chair Jerome Powell were to genuflect to Trump (which I don’t see happening) and start pumping gasoline into the fire by lowering interest in the face of those tariffs and rising petroleum inflation, which affects the price of everything else. There would be nothing like printing money into that storm to create the perfect storm for an oil-smoke-filled, desert scirocco of inflation or even hyperinflation, which could be very upsetting to the empire.
As stories today describe, Iran has said that, if the US becomes directly involved in attacking Iran, Iran will create havoc for the US. We all know they could do that just by making the Straight of Hormuz impassable. Someone is already jamming GPS systems in the straight and causing burning tanker shipwrecks, which could make the straight practically impassable because who wants to navigate the next oil tanker through those destabilized waters? Whether it was Iran or who jammed the GPS, I don’t know.
Iran could also lay mines. So, could Yemen. They could blow up merchant ships passing through so none dare try. There is lots of opportunity to create chaos, and Iran is leveraging that threat to try to keep the US from engaging actively in this conflict with its behemoth, bunker-busting bombs. The leveraging of threats, by itself, is driving up oil prices.
US bombers have flown in considerable numbers into the region along with fuel tankers for aerial refueling. Is that just to be ready in case Iran initiates war with the US by attacking its military or merchant ships in the Straight of Hormuz or attacking its military bases, or is it because the US is planning to take an active role in bombing Iran and, thereby, being the one to initiate war between the US and Iran? Donald Trump has only told us we’ll find out soon enough if it comes to that. One cannot expect he’d disclose his war plans openly, especially since he loves surprises even in the world of the ordinarily mundane. Whether this is purely defensive readiness or preparation for US direct involvement in taking out Iran’s nuclear facilities, disclosing that information is not something presidents do unless they are deeply stupid or bluffing.
So, the price of oil is soaring just from speculation about what is coming, and it has a fair likelihood of rising higher. If the US starts making its own direct attacks on Iran nuclear facilities, it has a very high likelihood of soaring into the stratosphere because there would not be much reason left for Iran to not do all it can to wreck havoc for the US and the West in a last hurrah. I suppose the one last thing that might keep Iran from taking that step would be if the US still stopped short of anything that looked like an attempt to take out the Ayatollah and cause regime change. If the US goes for regime change, however, then all hell will break loose as Iran’s leadership has nothing left to lose.
And, of course, there is always the BIG what if?
What if Iran actually already has nuclear weapons no one knows about, and finds an uncoventional way to deploy one, such as deep inside a loaded oil tanker bound for a US harbor where the surrounding crude shields any radiation from being detected and even amplifies the explosion? That is the very reason to try to make sure Iran never gets nuclear weapons, but that doesn’t mean it isn’t already too late.
It doesn’t have to be WWIII to be very bad, and any war can eventually escalate into WWIII, where multiple nations collide in nuclear holocaust, including this one. So, while no nation is likely to rush to Iran’s defense in any significant way—such as was once almost an autonomic response in the Arab world a decade ago—just to save Iran’s nuclear capacity or to start jihad against hated Israel, the possibility of people doing something really stupid to pour gasoline on this nuclear reactive mess is abundant, and we do have Agent Orange of CHAOS controlling US involvement, so, as Trump, himself, says, “We shall see soon enough” what he has in store for us all.