When Joe Biden last week said that his administration has been “discussing” possible Israeli plans to attack Iran’s oil industry in retaliation for Iran’s ballistic missile attack, it left the world stunned. Notably because Mr Biden didn’t reject these plans outright, in the way that he had the day before regarding a possible strike on Iran’s nuclear sites. Oil prices jumped 10%, even though the US president walked back the remark the next day.
The historian AJP Taylor wrote that “wars are much like road accidents” in that they had profound consequences but did not necessarily have equally profound causes. Targeted Israeli strikes on refinery complexes may not do much more than win domestic applause. Bombing Kharg Island, the heart of Iran’s oil-export operations, would cripple its economy. However, such a move might also drive up global oil prices and have an impact on American consumers just weeks before a crucial election.
Washington’s sanctions have failed to stymie Iran’s oil exports, largely because China has been willing to defy Washington. With Beijing purchasing about 90% of Iran’s crude oil, an Israeli attack on Iranian facilities would have uncertain consequences. The real risk lies in escalation, potentially drawing China into the conflict and reshaping Middle Eastern dynamics for years.
The outcome of such a conflict is hard to foresee. However, the aftermath of the US invasion of Iraq serves as a reminder that destabilising actions often invite outside powers to intervene in the Middle East. Last week, Russia conducted airstrikes in Syria against what it said were militant groups in an area under US control. The possibility of Russian military forces and American troops colliding in Syria has been a persistent worry as the adversaries took opposing sides in the country’s civil war. The Russian invasion of Ukraine has only sharpened the mutual antagonism.
Ultimately, the impact of an Israeli attack will hinge on Iran’s response and how major global oil producers react to the likely oil shock. China could offset the loss of its 1.5m barrels per day of Iranian oil by turning to Saudi Arabia, which has ample spare production capacity. However, Riyadh, having recently restored ties with Tehran, is cautious about being drawn into a conflict between Israel and Iran. The desert kingdom sought to improve relations with Tehran after its costly war with the Houthis triggered a devastating Iranian drone attack on its oil facilities. The attack, which bypassed US Patriot missile defences, temporarily cut Riyadh’s oil production in half.
An all-out war between Iran and Israel could lead to the closure of the strait of Hormuz, the world’s most critical oil transit chokepoint, through which a quarter of all tanker-shipped crude is moved. This would be a hammer blow to the global economy. But if Iran were backed into a corner with its export capacity reduced to a smoking ruin, it might close the strait in an act of desperation. Saudi Arabia and the United Arab Emirates reportedly refused to open their airspace to Israeli and US aircraft involved in bombing Iran last April. Both would no doubt think it prudent to do so again. War is not an acceptable and tolerable way of solving international disputes. It would be better to silence the guns in the region’s battle zones and resort to diplomacy. If leaders collectively embraced this view, the Middle East – and the world – would undoubtedly be a safer and more stable place.
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