US-IRAN CRISIS

The escalation of 'Shadow War'

In Summary
  • Brent futures rose $3.5 per cent on Friday, the highest since the attacks on Saudi Arabia’s oil facilities in September
  • I expect Oil to come off the boil this week because Iran will not react immediately but the spike risk will remain sky high
Combination photo of Iranian Revolutionary Guard Commander Qassem Soleimani (L) and Abu Mahdi al-Muhandis, a commander in the Popular Mobilization Forces.
Combination photo of Iranian Revolutionary Guard Commander Qassem Soleimani (L) and Abu Mahdi al-Muhandis, a commander in the Popular Mobilization Forces.
Image: REUTERS

The attack on Friday authorized by U.S. President Donald Trump on Iran’s now slain military commander Qassem Soleimani, the Iraqi militia leader Abu Mahdi al-Muhandis, and others was was a major escalation in the “shadow war”.

Let me begin with a selection of comments; The New York Times' Rukmini Callimachi wrote the evidence suggesting there was to be an imminent attack on American targets is “razor-thin” and that Trump was presented a menu of options for how to retaliate.

Killing Suleimani was the 'far-out option' “This is more than just bloodying Iran’s nose,” Stephen Innes, chief market strategist at AxiTrader Limited said in a note.

“This is an aggressive show of force and an outright provocation that could trigger another Middle East war.”

“This is how U.S.-Iran tit-for-tat spirals out of control. Iran’s response will be severe and deadly. And certainly may include escalating attacks on energy infrastructure.”

''But a response will have to come as this is nothing short of a declaration of war to a cornered country that has increasingly less to lose. The risks of miscalculation are at an all-time high'' Vali Nasr. 

I worked Iran account for years at the NSC under two Presidents. I’m honestly terrified right now that we don’t have a functioning national security process to evaluate options and prepare for contingencies said @KellymagsamenThe Crisis Group's Robert Malley Told the ⁦@nytimes: “Whether President Trump intended it or not, it is, for all practical purposes, a declaration of war.” 

Qasem Suleimani was an iconic figure known as the “Commander of Hearts” and “Soleiman the Magnificent” a reader of Gabriel García Márquez and of course the Leader of Iran’s Quds Force whom a former C.I.A. officer called  the “most powerful operative in the Middle East today.”

In that article in the New Yorker, Dexter Filkins wrote: When Suleimani appears in public—often to speak at veterans’ events or to meet with Khamenei—he carries himself inconspicuously and rarely raises his voice, exhibiting a trait that Arabs call khilib, or understated charisma.

“When I see the children of the martyrs, I want to smell their scent, and I lose myself.” It was Sulemaini who led the fight against Saddam As Revolutionary Guard commanders, he belonged to a small fraternity formed during the Sacred Defense, the name given to the Iran-Iraq War, which lasted from 1980 to 1988 and left as many as a million people dead.

Later, Suleimani and the group stand on the banks of a creek, where he reads aloud the names of fallen Iranian soldiers, his voice trembling with emotion. During a break, he speaks with an interviewer and describes the fighting in near-mystical terms. “The battlefield is mankind’s lost paradise—the paradise in which morality and human conduct are at their highest,” he says.

“One type of paradise that men imagine is about streams, beautiful maidens, and lush landscape. But there is another kind of paradise—the battlefield.”The front, he said, was “the lost paradise of the human beings.”

The supreme leader, who usually reserves his highest praise for fallen soldiers, has referred to Suleimani as “a living martyr of the revolution.” “In the end, he drank the sweet syrup of martyrdom.”Qasem Suleimani resisted Saddam, he resisted the Taliban, he resisted IS and all that is left of him is his ring.

His Assassination is ''peak'' Netanyahu, Pompeo, Maryam Rajavi, Saudi ''cut off the head of the snake'' made on the fly ''rogue''''Wag the Dog''  Foreign Policy. We are now in an unfathomable and entirely unpredictable and non-linear Phase Iran’s supreme leader, Ayatollah Ali Khamenei, vowed that “severe retaliation” awaits the killers of Suleimani. 

At the beginning of From Russia With Love (the movie not the book), Kronsteenn is summoned to Blofeld’s lair to discuss the plot to steal the super-secret ‘Lektor Decoder’ and kill Bond. Kronsteen outlines to Blofeld his play Blofeld [read Trump]: Kronsteen, you are sure this plan is foolproof? Kronsteen [read Pompeo]: Yes it is because I have anticipated every possible variation of counter-move.Let me predict some counter moves. 

Pompeo tweeted a photo of about 20 Iraqis [I joke not] Iraqis — Iraqis — dancing in the street for freedom; thankful that General Suleimani is no more.

@SecPompeoI responded by asking: Are you prepared for 1 million Iraqis at the Embassy in Baghdad next Friday @SecPompeo? What happens if Ayatollah Sistani issues a fatwa asking US troops to leave?

The first prediction is that the US Iraq misadventure is now over, the only open question is around the timing. The dog of war is a phrase spoken by Mark Antony in Act 3, Scene 1, line 273 of William Shakespeare's Julius Caesar: "Cry 'Havoc!,' and let slip the dogs of war." The Iranians kept their Allies from Yemen to Lebanon to the Eastern Province in Saudi Arabia to Bahrain and all points in between on a leash.

Trump released that leash. Brent futures rose 3.5 per cent on Friday, the highest since the attacks on Saudi Arabia’s oil facilities in September. Brent crude for March settlement rose $2.35 a barrel to $68.60, after rising as much 4.9 per cent earlier.

West Texas Intermediate for February delivery added $1.87 to settle at $63.05 a barrel, after advancing as much as 4.8 per cent. The strike also escalates an already tense three-way situation between the U.S., Iran, and Iraq.

The two Middle East countries combined pumped more than 6.7 million barrels a day of oil last month, according to data compiled by Bloomberg, more than one-fifth of OPEC output. Exports from both countries rely on the Strait of Hormuz, the narrow and crucial oil and natural gas shipping choke-point.

I expect Oil to come off the boil this week because Iran will not react immediately but the spike risk will remain sky high and the price will spike when the counter move is made. 

This is an Archduke Franz Ferdinand moment. Archduke Franz Ferdinand Carl Ludwig Joseph Maria of Austria (18 December 1863  28 June 1914) was the heir presumptive to the throne of Austria-Hungary.

His assassination in Sarajevo is considered the most immediate cause of World War I.