Iran might well be known as ‘terror incorporated” as their proxies funded by Iranian oil money had another active week. Iran continues to taunt the United States and the world almost daring them to respond to their reign of terror support and betting that they won’t.
Of Course, the Biden administration’s failed attempts to appease Iran to try to get them to rejoin the Iranian nuclear agreement after reversing the previous administration’s maximum pressure campaign has backfired with disastrous consequences.
Not only did the Iranian-backed Hamas carry out a heinous terror attack in Israel leading to war but helped the Iranian-backed Houthis to shut down international shipping lanes which is a clear act of war. Israel over the weekend showed the senior Iranian guard in an attack in Syria Iran’s Revolutionary Guards says that Israel will pay for killing their commander.
Now attacks on US Bases in Iraq have caused injuries.
The U.S. Department of Defense did confirm President Biden ordered strikes on an Iranian-aligned group after 3 U.S. servicemembers y were injured during a “Suicide” Drone Attack by the Iranian-backed military on Al-Harir Airbase in Northern Iraq, with 1 of the American Servicemembers being Critically Injured and Airlifted to Higher Medical Care outside of U.S. Central Command’s (CENTCOM) Area-of-Operations.
The actions over the weekend raise the odds of escalation and the risk to oil supply and transport. Reuters reports that “Two explosions in the Red Sea were reported by a vessel sailing off the coast of Yemen on Tuesday shortly after two unmanned aircraft were sighted, a British maritime authority said.
The explosions occurred around 5 miles from the vessel in an area of the Red Sea 50 miles from the port of Hodeidah on Yemen’s west coast, the United Kingdom Maritime Trade Operations (UKMTO) said in an advisory. The identity of the vessel, details of the cargo onboard, or where it was sailing to or had sailed from were not disclosed.
Iran took advantage of the nuclear talks with the Biden administration to raise their oil output and enrich themselves.
Now it appears that Iran will start taking steps to get a nuclear weapon anyway. Reuters reported that according to the International Atomic Energy Agency, Iran reversed a months-long slowdown in the rate at which it is enriching uranium to up to 60% purity, close to weapons grade, the U.N. nuclear watchdog said on Tuesday.
Many diplomats believed the slowdown, which had begun by June, was the result of secret talks between the United States and Iran that led to the release of U.S. citizens held in Iran earlier this year. Iran already has enough uranium enriched to up to 60%, if enriched further, to make three nuclear bombs, according to the International Atomic Energy Agency’s theoretical definition, and more at lower enrichment levels. Iran denies seeking nuclear weapons.
Iran has “increased its production of highly enriched uranium, reversing a previous output reduction from mid-2023”, the IAEA said in a statement summarizing a confidential report to member states seen by Reuters that was sent minutes earlier.
The supplies tighten the Biden administration is vowing to do more to stop Russian exports of crude and to lower their revenue India on the other hand is pointing out that without Russian oil the market is going to see a huge supply deficit. India has been one of the major buyers of Russian crude along with China.
While the oil market has been relatively unconcerned about supply disruptions in part because the US is producing a record amount of oil the reality is that if we get into the high demand. These disruptions are going to matter. Week we could start to see the beginning of crude oil drawdowns and strong crack spread seems to suggest that the demand for products is going to continue to be strong. So far, the weather is relatively mild, but some people are predicting the change, and if that happens not only could it impact oil and products but definitely on the natural gas side.