The United States believes that Israel has not yet decided how to respond to the attack from Iran, including the possibility of hitting its oil facilities, according to a US official.
“As the president said, we continue to have discussions with the Israelis about their response to Tuesday’s attack and we understand that they have not yet decided exactly what they will do,” the official told The Times of Israel.
It is noted that US President Joe Biden hinted earlier today that Israel is considering an attack at Iranian oil installations in response to Iran’s missile attack.
But what would that entail and what effect would it have?
Following Iran’s missile attack on Israel on Monday, benchmark Brent crude rose 10% to $77 per barrel, although it remains below levels seen earlier this year.
Oil and gas are lifeblood of the Iranian economy and an important source of revenue for the Revolutionary Guard Corps. Therefore, an obvious target for an Israel determined to retaliate.
Iran’s main oil export terminal is the offshore island of Harg in the north of the Gulf, near the port of Boucher.
During the eight-year war between Iran and Iraq in the 1980s, the island was a frequent target of airstrikes by the Iraqi air force.
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Israel has shown it has the range to hit long-range targets after twice bombing the Yemeni port of Hodeidah from a distance of 2,000 kilometers and also hitting an Iranian radar site near Isfahan.
Bombing Harg, however, would be complicated, as Israeli warplanes would have to fly over the airspace of Arab states or bypass the entire coast of the Arabian Peninsula, which would require extensive refueling.
The result of Israel’s possible attack would be twofold.
Oil prices will likely rise, at least in the short term. For Iran, on the other hand, a tough response will be the only solution.
And it is this last, unknown factor that forces the US to warn of containment.
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