Opinions

Anxiety over next phase of Israel-Iran escalation: Potential implications on energy, fertiliser prices, shipping, even US prez polls



There is anxiety as the next phase of IsraelIran escalation remains mired in uncertainty, with potential implications on energy and fertiliser prices, shipping through the Straits of Hormuz in addition to the current disruptions in the Red Sea, the peace and tranquillity in the Gulf and West Asia, and even the US presidential elections.

The conflict has seen a step-bystep escalation, starting with the Hamas attack of October 7 last year. Israel, in response, has continued with its air and ground operations in Gaza. More than 40,000 have died from this action, nearly two million displaced and property and infrastructure severely damaged. The population there is suffering from food shortages and break down of health care.

Intense multi-country efforts for ceasefire, led by the US, Egypt and Qatar, have floundered, buffeted by Israeli desire for a permanent end or irreplaceable degradation of Hamas military and governance structures, and countervailing Hamas’ demands for the ceasefire to be ‘permanent’. Around 100 Israelis remain hostages since October 7with no clarity on how many may still be alive. Anger against Israel and criticism of its actions in many countries has only grown.

In an unprecedented step, Israel recently declared the UN Secretary General persona non grata and barred his entry. South Africa has appealed to the International Court of Justice against Israel’s actions, and the International Criminal Court is examining issue of arrest warrants against Israel’s prime minister and defence minister. However, support for Israel has sustained in many European countries, particularly in the US, despite opposition from Arab and Muslim populations there, and sections of the Democratic base and the Jewish community itself.

There is escalation on the IsraelLebanon border. Intensified air attacks have been followed by ground incursions in response to sustained Hezbollah firing over the past year which displaced 70,000 Israelis from northern Israel. Hezbollah leader Nasrallah and several of its top military leaders have been killed, which Israel had not been able to achieve during a similar campaign in 2006.


In its actions against Hezbollah, Israel targeted Iranian supplies through Syria, and Iranian officials in Syria and Lebanon coordinating with the Hezbollah leadership. The killing of nine Iranian Revolutionary Guard officials in Damascus prompted the Iranian drone, cruise and ballistic missile attack on Israel in April this year, which was largely thwarted by coordinated US, UK, Israeli action along with some Gulf countries. To avoid escalation, Israel was then persuaded to give a measured response, without causing any significant damage but displaying capability to penetrate Iranian air defence.The killing of Hamas leader Ismail Haniyeh in Tehran in July was perceived by many in Iran as a violation of its sovereignty. The decapitation of a significant section of the top Hezbollah leadership in Lebanon in September was seen as a challenge to its influence with groups it has supported in the region.The October 1 Iranian ballistic missile attack, with 180 missiles, was of a higher order, with several getting through, including near the important air base at Nevatim and the headquarters of Israel’s intelligence agency Mossad near Tel Aviv (the headquarters of its Ministry of Defence). Israel will feel the need to respond, as it believes that only a show of strength establishes deterrence in its neighbourhood.

Israel’ supporters, including the US, want to end the escalation. US has its hands full in Europe with the Russia-Ukraine conflict, where it has provided nearly $100 billion of assistance to Ukraine. Its allies in the Indo-Pacific, such as Philippines and Japan, are facing constant Chinese assertive actions in the East and South China seas. President Biden, in his Presidential campaign in 2020, had spoken of reducing active US military engagements abroad, reflected in the withdrawal from Afghanistan in August 2021. However, there is significant support in the US to support Israel fully, and Kamala Harris would be criticised by the Trump campaign of weak leadership in the global context if the Biden-Harris administration is seen wavering in any way.

Many have pointed out that Netanyahu is able to ignore US recommendations on ceasefire because he is conscious of the political compulsions of the US president. US rivals, Russia and China will look to show up signs of US wavering or capacity limits as it engages in nearly three theatres simultaneously.

Aside from energy prices, India will be mindful of the welfare of nine million Indians in the Gulf, and policy constraints for India if the US moves for further sanctions on Iran.

The writer is former ambassador to the US and Israel.



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