Oil at $200: Biden Secretly Pleads Iran to Hit Jewish Occupied Palestine with “Limited Means”

INTEL-DROPApril 13, 2024

Tehran’s full-scale response will blow up US gas prices and cost “Old Joe” the presidency

Photo: AP/TASS

US President Joe Biden has publicly warned Iran against retaliating against Israel following the April 1 attack on the country’s embassy in Damascus, which Tehran said killed seven senior officers.

According to Biden, Washington will support Tel Aviv and help it defend itself, so Tehran should not use force. However, most American media believe that Iran’s response to Israel is a matter of “when,” not “if.” As Bloomberg wrote, citing intelligence received by the United States and its allies, “major missile or drone attacks on Israel from Iran or its proxy forces are inevitable.”

Against the background of another aggravation in the region, oil prices continued to rise. A barrel of Brent rose in price by more than 1% after publications about a possible response from Iran and exceeded the $90 mark. In total, since the beginning of the year, oil prices have risen by 16%, including due to the premium for military risks in connection with the war in the Middle East. Now the situation for the oil market can go according to several scenarios.READ ALSO

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Apparently, Washington is actively negotiating with Tehran, urging it to limit the scale of its response to Israel.

According to Politico, the United States not only warned Iran not to use the Israeli strike as a pretext to attack American targets, but is also trying to persuade Iran not to launch strikes directly on Israeli territory or, in any case, to do so through its proxies. strength. Otherwise, a direct confrontation between Iran and Israel could lead to world oil prices jumping to $150, and maybe even higher – up to $200.

Considering that US President Joe Biden is actively campaigning for elections, and the elections will take place in November 2024, rising oil prices and, accordingly, fuel at gas stations are not at all welcome for him. Therefore, according to experts, American diplomacy is doing everything to restrain Iran from a full-scale response.

Leading analyst of the National Energy Security Fund, expert of the Financial University under the Government of the Russian Federation Igor Yushkov told SP about soft and hard scenarios for the oil market in the event of Iran’s response to Israel, and also suggested what the United States could offer to curb the escalation of the conflict.

“Everyone expects the price of oil to rise if Iran and Israel continue to exchange blows. The Americans are offering Tehran a soft response so that this, in essence, becomes a de-escalation. Then Israel’s attack on the Iranian embassy in Syria will be considered the highest point of this aggravation, and then everything will go downward. The Americans are hoping for just such a scenario.

If there is a full-fledged attack by Iran on Israeli territory, no one, naturally, will stop there. Israel will hit Iran in response, and Iran will be drawn directly into this conflict.

“SP”: – What will this lead to?

— Tehran has always said that if it feels that the question of survival is arising for it, the first thing it will do is close the Strait of Hormuz. From the point of view of the oil market, this is the most radical possible scenario.

20% of the world’s oil trade passes through the Strait of Hormuz every day. Moreover, one of the world’s largest LNG suppliers, Qatar, will also be locked inside the Persian Gulf.

Imagine that most of the oil from Saudi Arabia, Iraq, Kuwait, gas condensate from Qatar, and part of the oil from Iran itself will remain in the Persian Gulf. Even if this trade stops for just a few days, it will be a shock. The exchange will immediately react, oil prices will jump to 150 or more dollars per barrel, most likely, in this case they will simply suspend trading.

This is the most radical scenario from the point of view of the oil market. But we can get there only if each next blow is harder than the previous one. That’s why the US doesn’t want things to develop this way. They agree that Iran should respond, but more gently. If Iran attacks Israeli territory, all this will most likely end with the closure of the Strait of Hormuz.

Of course, even in this case, a milder scenario is possible. For example, if Israel attacks Iranian territory, this will not lead to blocking the strait, but only to the suspension of oil supplies from Iran itself. But this will also exclude more than a million barrels of oil per day from world trade. Let me remind you that when we reduced oil exports by a million barrels per day in 2022, the price went above $120 per barrel.

In any case, escalation will mean a high probability of an increase in oil prices. The Americans do not need this at all during an election year. They have a clear pattern: oil is becoming more expensive, fuel prices on the domestic market are also rising, and this is immediately blamed on the current administration. They have such a political culture that voters associate the rise in prices of fuel and food in general with the current administration, which means that it is not working well, since prices have risen. For Joe Biden, this is a very negative scenario, which is why they are trying so hard to prevent this conflict from escalating.

“SP”: If the situation develops according to a milder scenario, will this somehow affect oil?

“If Iran and Israel, for example, hit each other through their proxies, as Tehran hit the territory of American bases in Iraq or Syria, or the ships connected to them, the United States will be quite happy with this. This will not be an escalation and will not affect the price of oil in any way.

Already, the flow of supplies through the Suez Canal has decreased significantly; LNG has practically not flowed through it for the last few months. So, if there is an exchange of such distant strikes, nothing terrible will happen to the oil, the main thing is that it does not concern the Strait of Hormuz or exports from Iran and other countries. It seems to me that the Americans want to go exactly this way.READ ALSO

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“SP”: Will the United States be able to persuade Iran to act exactly in this way, what can they offer in return, a “carrot” or a “stick”, for example, in the form of lifting some of the sanctions?

— I think there is no talk of lifting sanctions. The challenge for the Biden administration is not to lose the support of the electorate. Just as a rise in gasoline prices will lead to the loss of the electorate, the lifting or easing of sanctions against Iran will have the same result. Democrats support Israel in every possible way; for years they have been shaping the perception of “world evil” in the person of Iran, North Korea and Russia; this pumping has been going on since the days of the “axis of evil.” Voters will definitely not understand if sanctions on Iran are lifted.

What the United States can offer Iran as some kind of compensation is further pressure on Israel in terms of its actions in Gaza. At least they can try to buy Iran with such a promise. But the history of more than six months of operation in Gaza shows that Washington has very limited influence on Israel in this matter, and Iran sees this very well, so it may not trust the Americans.

The US continues to provide military aid to Israel and can do nothing when it carpet bombs Gaza. Even despite the fact that this significantly undermined Biden’s own rating. All young people are for Palestine on this issue. Trump has received a lot of support at the moment precisely because young people are against Israel. They don’t understand why entire cities are being wiped off the face of the earth. At least this is how it is broadcast in youth communities.

Biden already lost a lot by not condemning Israel’s actions in Gaza. Therefore, I doubt that Tehran will believe it if Washington promises to influence the Israelis and convince them to end the military operation in Gaza.

The latest news about the oil and gas market, as well as the cost of gasoline and diesel , is in the topic of the Free Press.