The Lebanese militant group Hezbollah and Iran are said to be planning a “direct attack” on Israel should negotiations on a ceasefire in the Gaza Strip fail. A possible ceasefire agreement between Israel and Hamas, which is anticipated to be reached this week, could only prevent Iran from launching a retaliatory attack for the assassination of Hamas political leader Ismail Haniyeh, according to Iranian sources who spoke to Reuters under the condition of anonymity. ambassador to Turkey, Jeff Flake, previously stated that Washington has urged Ankara to encourage Tehran to de-escalate tensions in the region. However, Iranian Foreign Ministry spokesperson Nasser Kanaani emphasized that Western appeals for Tehran to avoid a retaliatory response “lack political logic.”
Israel keeps up strikes in Gaza as fears of wider war grow
DUBAI, United Arab Emirates (AP) — As Iran threatens to respond to the suspected Israeli assassination of Hamas leader Ismail Haniyeh in Tehran, the regional militias that the Islamic Republic has armed for decades could play a role in any attack. In April following an Israeli attack on the Iranian Embassy compound in Syria, Iran launched 170 bomb-carrying drones, more than 30 cruise missiles and more than 120 ballistic missiles toward Israel. Israel, the U.S. and other nations shot down many of the projectiles, some of which came from Yemen. Iran could launch a similar assault, but this time Hezbollah may get involved as the militia seeks revenge for the Israeli strike last week killing senior commander Fouad Shukur. Such an assault could strain Israeli air defenses, meaning more missile strikes raising the risk of casualties — and of a further escalation experts fear could lead to a wider regional war. Iran, including over its nuclear program, have kept it from receiving new arms while Israel and Gulf Arab states allied with the U.S. have received advanced weapons. While developing its own missile program, Iran can’t match those sophisticated weapons. It relies on militias as an asymmetric threat to squeeze both Israel and the United States. Iran’s arming began in earnest in the 1980s with Shiite forces in Lebanon fighting against Israel. They became the Hezbollah militia. The arming expanded with the 2003 U.S.-led invasion of Iraq that toppled dictator Saddam Hussein, a longtime foe of Tehran. Iran strongly backed Syrian President Bashar Assad in his country’s long war. And Iran has continued when the opportunity has arisen, even arming Sunni militants while viewing itself as the world’s defender of Shiite Muslims. Those relationships are managed by Iran’s paramilitary Revolutionary Guard, one of the most powerful armed groups in the Middle East.
The militias in Iran’s self-described “Axis of Resistance” include these:
In Iraq, Iran supported a slew of forces that mobilized in 2014 to battle the Islamic State group. Those state-sanctioned, mainly Shiite militias, known as the Popular Mobilization Forces, have grown into a powerful political faction, armed with rockets, drones and other weaponry. The International Institute for Strategic Studies puts their strength at some 180,000 fighters. Other smaller or little-known militant groups have emerged and claimed attacks against U.S. forces as well amid this Israel-Hamas war. Iran-backed armed groups attacked U.S. personnel in Iraq more than 60 times between October and Feb. 4, according to the Congressional Research Service. The deadliest came on Jan. 28, when the U.S. said a drone launched by Iranian-backed Iraqi militias hit a facility known as Tower 22 in Jordan on the Syrian border, killing three American troops and wounding dozens of others. In response, U.S. airstrikes hit more than 85 targets at seven locations, including command and control headquarters, intelligence centers, rockets and missiles, drone and ammunition storage sites and other facilities connected to the militias or the Guard’s expeditionary Quds Force.
Hezbollah formed in 1982 amid Israel’s occupation of southern Lebanon. Israel remains highly wary of Hezbollah, particularly over the vast missile arsenal it is believed to possess and its battle-hardened forces who also supported Assad in Syria. While Israel has sophisticated missile defenses including its Iron Dome system, a mass barrage of fire from Hezbollah and others at the same time could overwhelm the country. Estimates suggest Hezbollah has an arsenal of 150,000 rockets and missiles, including precision-guided missiles. The militia also has been blamed for suicide bombings in the past, including a 1983 bombing in Beirut that killed 241 American servicemen, though the group maintains it wasn’t behind the attack. Hezbollah also has drones and surface-to-air missile systems. Hezbollah’s forces number as many as 25,000 full-time fighters, with additional tens of thousands in reserves, according to an Israeli military assessment. Hezbollah’s leader Hassan Nasrallah in 2021 said the group had 100,000 trained fighters.
Despite being Sunni, both the Palestinian militant group Hamas and Islamic Jihad have received weaponry and other materiel from Iran. The groups, however, have been struck hard by Israel since the Oct. 7 Hamas attack that began the war, which saw militants kill 1,200 people and take 250 others hostage. Israel’s war on Hamas in the Gaza Strip since has killed at least 39,580 Palestinians, according to Gaza’s Health Ministry, which does not distinguish between civilians and combatants in its count. Israel’s military says it has killed roughly 15,000 militants in the war.
The Houthis have held Yemen’s capital, Sanaa, since 2014 as part of that country’s ruinous war. They follow the Shiite Zaydi faith, a branch of Shiite Islam that is almost exclusively found in Yemen. While broadly an insurgent force, the group with Iran’s support is now able to launch drone and missile attacks that have drastically disrupted shipping in the Red Sea corridor and now even reach Israel. The U.S. Navy’s efforts at stopping the shipping attacks have led to the most intense continuous combat its sailors have faced since World War II, but has yet to end the assaults. The amount of direct command Iran wields over the Houthis, however, remains a matter of debate among experts. The Houthis’ attacks have raised their international profile while cracking down on dissent at home. The rebels claim they’ve recruited 200,000 additional fighters since launching their attacks. The rebels and their allies have a fighting force of some 20,000 fighters, according to the International Institute for Strategic Studies.
Oil Soars Above $80 Amid Fears of Iranian Reprisal
Oil capped its biggest daily gain since October as fears of a potential Iranian response to last month’s assassination of a Hamas leader in Tehran outweighed a dip in broader markets. West Texas Intermediate crude soared $3.22 to settle above $80 a barrel. Tehran reiterated Sunday its determination to punish Israel for the killing, as the US shored up naval and air forces in the Middle East. The US benchmark crossed above its 200-day moving average, a move that supercharged upward momentum.
“Algorithmic trend followers still hold dry powder in Brent crude, suggesting aggressions from Iranian soil could still spark additional buying activity from this cohort,” said Dan Ghali, a commodity strategist at TD Securities.
The gains signal a possible shift in money managers’ positioning. Last week, macroeconomic gloom prompted hedge funds and algorithmic traders to roll back their net-long wager in ICE Brent to the smallest since the data was first published in 2011. Bullish bets on gasoline and diesel in the US were also at multiyear lows. Traders will be looking to market reports this week for more clarity on supply and demand balances. OPEC on Monday trimmed forecasts for global oil demand this year and next. The International Energy Agency will publish its monthly outlook Tuesday, which will be followed by US inflation data Wednesday.
WTI surges by 3.5% on US fears of Iran attacking Israel
The prices of oil futures continued to rise on Monday after the White House expressed its concerns that Iran could attack Israel and that it could happen this week, fueling worries about the export of the commodity from the Middle East. West Texas Intermediate (WTI) for September’s settlements skyrocketed by 3.51% at 1:54 pm ET to sell for $79.48 per barrel. At that time, Brent for October’s deliveries gained 2.71% to go for $81.82 per barrel.
Gold up by 1.6% on Middle East concerns
The prices of precious metals rose on Monday after Israel and the United States voiced concerns that Iran could attack the former country, seemingly turning traders to safer investments such as those in gold. Gold increased by 1.61% at 2:23 pm ET to sell for $2,469.61 per ounce. At the same minute, silver grew by 1.87% to go for $27.96 per ounce. Platinum went up by 1.77% to sell for $942.27 per ounce. Palladium advanced by 1.60%, going for $911.52 per ounce.
Israel keeps up strikes in Gaza as fears of wider war grow
CAIRO, Aug 12 (Reuters) – Israeli forces pressed on with operations near the southern Gaza city of Khan Younis on Monday amid an international push for a deal to halt fighting in Gaza and prevent a slide into a wider regional conflict with Iran and its proxies. Palestinian medics said Israeli military strikes on Khan Younis on Monday killed at least 18 people and wounded several. Meanwhile more families and displaced persons streamed out of areas threatened by new evacuation orders telling people to clear the area. Later an Israeli airstrike killed five people in the Zeitoun suburb of Gaza City, and two others were killed in Rafah, near the border with Egypt, medics said.
As fighting continued, Hamas reacted sceptically to the latest round of Egyptian and Qatari-brokered talks due on Thursday, saying it had seen no sign of movement from the Israeli side. The group said on Sunday that mediators must force Israel to accept a ceasefire proposal based on ideas from U.S. President Joe Biden, which Hamas had accepted, “instead of pursuing further rounds of negotiations or new proposals that would provide cover for the occupation’s aggression”. Two sources close to Hamas told Reuters the group was convinced the new call for talks was coordinated beforehand with Israel to deter responses from Iran and Hezbollah to the assassination of the group’s chief, Ismail Haniyeh, in Tehran and a top Hezbollah leader in Lebanon. “It is a mild rejection you can say. Should Hamas receive a workable plan, an Israeli positive response to the proposal it had accepted, things may change, but so far Hamas believes Netanyahu isn’t serious about reaching a deal,” said one Palestinian official close to the mediation effort. Hamas’ reaction to the talks came as preparations for a larger scale confrontation grew, with Washington ordering a guided missile submarine to the Middle East and the Abraham Lincoln strike group accelerating its deployment to the region.
Israeli Defence Minister Yoav Gallant told U.S. Defense Secretary Lloyd Austin that Iran was making preparations for a large-scale military attack on Israel,
Israel reportedly detects Iranian preparations for attack
Israeli Defense Minister Yoav Gallant told United States Secretary of Defense Lloyd Austin in a phone call on Sunday that Israel detected military preparations in Iran that have not been observed during the last few days, the Israeli media reported. Previously, it was also reported by the Israeli intelligence community that Iran is planning to launch an attack on Israel in the coming days. It is not known, however, whether the assault will be coordinated by both Iran and Hezbollah, or whether the Lebanon-based militant organization will retaliate against Israel separately. Sources in the Israeli intelligence community as cited by Axios, alleged the attacks will be more severe compared to the events in April when Tehran launched drones and missiles against targets in Israel in response to the attack on its consulate in Damascus, Syria. High-ranking Iranian officials repeatedly stated retaliation against Israel was certain to come but did not provide further details.
Oil Prices Up On Geopolitical Risk…… US Orders Military Buildup
Crude oil prices started the week up after U.S. Defense Secretary Lloyd Austin announced a guided missile submarine would be deployed to the Middle East. The move comes as Israel and its U.S. allies brace up for an attack by Iran and its regional allies in the Middle East in retaliation for the killing of Hamas leader Ismail Haniyeh in Tehran and that of a senior Hezbollah figure in Lebanon. “Secretary Austin reiterated the United States’ commitment to take every possible step to defend Israel and noted the strengthening of U.S. military force posture and capabilities throughout the Middle East in light of escalating regional tensions,” a statement by the Pentagon said, as quoted by Reuters.
The prices of oil futures rose on Monday with WTI up over 1% as investors remained laser-focused on tensions in the Middle East. While some reports claimed that a ceasefire between Israel and Hamas might be within reach, others revealed that Iran’s strike on the former could come before negotiators sit down to talk on August 15. It was also mentioned that the Iranian Revolutionary Guard and the new president’s administration remain at odds with regard to the scale of the attack. Many world leaders expressed their worries over the potential move as it could be a prelude to a regional conflict. West Texas Intermediate (WTI) for September deliveries gained 1.11% to sell at $77.70 per barrel at 4:06 am ET. At the same time, Brent for October settlements increased 0.83%, going for $80.36 a barrel. “The immediate market concern will be attacks on Iran’s oil supply and infrastructure,” Commonwealth Bank of Australia analyst Vivek Dhar told Bloomberg. Even so, Dhar added
“We see Brent oil futures trading between $75 and $85 a barrel in the short term,” noting that in case of a bigger war in the Middle East prices will jump.
Prices also received some support from statements made by U.S. Fed officials, who suggested last week that inflation may be declining sufficiently to motivate an interest rate cut sooner rather than later. Interest rates in the U.S. have been one of the main bearish factors for oil this year. “All the elements of inflation seem to be settling down (and) I’m relatively hopeful based on the conversations I’m having that that’s going to continue,” Richmond Federal Reserve Bank President Thomas Barkin said, as quoted by Reuters, on Friday.. NN BlackMask Pod Cast:
Big Military buildup
Biden: Trump is a genuine danger to national security
US President Joe Biden warned that a second term for Donald Trump would pose a significant threat to national democracy and security. In an extract of a CBS interview published on Sunday, he emphasized the importance of current global decisions, stating that choices made in the coming years could shape the next six decades. Biden also criticized the Supreme Court, calling it “out of whack,” and proposed an 18-year term limit for justices. He highlighted the danger posed by “mega Republicans” who, in his view, show little regard for political institutions. Biden underscored that safeguarding democracy is essential to the nation’s identity. NN: This is not helpful. Trump is a known quantity. It’s not his first rodeo. The Democrats are trying to cause panic. I am afraid it’s going to get uglier.
13 injured in Ukraine’s attack on Kursk
At least 13 people were injured in a Ukrainian airstrike on the Russian city of Kursk, in the region of the same name. According to local authorities, a Ukrainian missile hit a residential building, resulting in a fire. Kursk acting Governor Alexey Smirnov said emergency services are working at the site of the attack. “Ukrainian special services are spreading rumors about panic in the city, but this is not true,” he added.
A ministry statement said the Russian military and border guards have blocked Ukrainian forces from pushing deeper into the region in southwestern Russia. It added that the army is attacking Ukrainian fighters trying to advance into the area from Ukraine’s Sumy region.
“Attempts by individual units to break through deep into the territory in the Kursk direction are being suppressed,” the ministry said.
Ukrainian troops had advanced as much as 15 kilometers (9 miles) into Russian territory, according to the Institute for the Study of War, a Washington-based think tank. The data that hasn’t been officially confirmed. Kyiv has not commented on the incursion. In a video address to the nation late Thursday, Ukraine’s President Volodymyr Zelenskyy did not mention the fighting in the Kursk region but emphasized that “Russia brought the war to our land, and it should feel what it has done.” “Ukrainians know how to achieve their goals,” Zelenskyy said, adding that he received three “productive reports, exactly the kind our country needs now” on Thursday from the commander of Ukraine’s armed forces, Oleksandr Syrskyi.
Oil Markets Driven by Macro Economy, Not Fundamentals
- Oil prices rose for the fourth straight session on Friday, boosted by positive U.S. jobs data that eased economic concerns.
- The U.S. Labor Department reported a significant drop in unemployment claims, suggesting resilience in the job market.
- Despite positive economic signals, oil markets are cautious due to the potential impact on Federal Reserve interest rate decisions.
Oil prices settled higher on Friday for the fourth consecutive session, after positive U.S. jobs data helped ease growing jitters about the state of the U.S. economy. Brent crude for September delivery was up 62 cents to trade at $79.78 per barrel at 16:45 hrs ET while the corresponding WTI crude contract was changing hands at $77.07/bbl, good for a 62 cents gain. The latest data by the Labor Department revealed that initial claims for state unemployment benefits fell 17,000 to a seasonally adjusted 233,000 for the week ended Aug. 3, the lowest level in 11 months. That figure came in lower than 240,000 jobless claims forecast by economists polled by Reuters. Overall, the U.S. economy grew at a 2.8% clip in the second quarter, double the growth pace in the first quarter. “The talk of an imminent recession seems wide of the mark,” Marc Chandler, chief market strategist at Bannockburn Global Forex, told Reuters. His sentiments are echoed by BlackRock saying the U.S. recession fears are overdone. The asset manager has argued that the July U.S. jobs report is more in-line with an economic slowdown than a recession. BlackRock notes that job creation is slowing, but averaged a robust 170,000 over the past three months; consumer spending, while cooling, remains relatively healthy and Q2 corporate earnings have so far topped expectations, with S&P 500 earnings growth projected at about 13%, above the 9% expected at the start of the season. BlackRock is the largest money manager in the world with $9.1 trillion in Assets Under Management (AUM). With oil markets now focusing more on the state of the U.S. economies and largely ignoring supply/demand fundamentals, another presidency by Republican candidate Donald Trump might not be a bad idea, after all.