Horizontal Escalation.
A region on fire.
News Items is the first thing I read every morning. — Katie Couric.
1. The global price of oil briefly rose above $100 a barrel earlier today, even after a group of more than 30 countries pledged to tap their reserves to stabilize markets. The spike reflected fears that the growing war in the Middle East could cripple a major part of the world’s oil and gas supply for an extended period. (Source: nytimes.com)
2. Escalating Iranian attacks and the U.S. government’s decision to hold off on military escorts for oil tankers through the Strait of Hormuz are raising the prospect of a prolonged closure that would choke off exports through the world’s most important energy-transport route. Yesterday, the Islamic Revolutionary Guard Corps struck three cargo ships attempting to transit the waterway, the only sea route out of the Persian Gulf. It warned that any other vessels trying to move through the strait also would be targeted. Later on Wednesday night, in an incident far from the strait, two foreign tankers carrying Iraqi fuel oil were ablaze in Iraqi waters after being hit by projectiles, Iraqi ports officials said. (T)he shutdown of the strait is fast causing a global economic disruption and a major military and political challenge for the Trump administration. (Sources: wsj.com, bloomberg.com)
3. The Economist:
“This will bring down the economies of the world,” warned Saad al-Kaabi, Qatar’s energy minister, on March 6th. It was not hyperbole. Days earlier QatarEnergy, which produces a fifth of the world’s liquefied natural gas (LNG), shut down its production and export facilities after some were hit by Iranian strikes. Unable to extract, process and, because the Strait of Hormuz is all but blocked by the fighting, ship its LNG, the firm has declared force majeure on its contracts. The price of LNG has ballooned on world markets. Customers the world over, who use it to generate electricity, heat homes and make things like fertiliser, are scrambling to respond.
Exactly how far down the Qatari pause will bring economies hinges on the answers to four tough questions. How long will it last? How quickly can shipments resume in full once it ends? Can countries live off existing reserves until then? And how much of the gap can be plugged by LNG from elsewhere? Read the rest. (Source: economist.com)
4. The Wall Street Journal:
President Trump—faced with rising oil prices and pushback from his MAGA base—is signaling that he wants to wind down the war he launched against Iran less than two weeks ago. But stopping the fighting carries big risks, even if Iran lets him.
If Trump proclaims victory, stops the bombing and begins to withdraw the huge air and naval assets he assembled in the Middle East, it could soothe global markets, at least in the short term, and reassure American voters uneasy about the prospect of another forever war.
But leaving in place Iran’s theocratic regime—angry, defiant and in possession of its nuclear stockpile and what remains of its arsenal of missiles and drones—would essentially grant Tehran control over the world’s energy markets. It would also sacrifice the security of America’s partners and allies, and possibly make another, more devastating, regional war likely. (Source: wsj.com)
5. Iran has told regional intermediaries that for a ceasefire, the US must guarantee that neither it nor Israel will strike the country in the future, according to several officials familiar with the matter. Iran is particularly concerned Israel will attack again after the current war ends, said the people, who asked not to be identified discussing sensitive matters. It’s unclear if the US is willing to give Iran such a pledge and if it would be able to insist on Israel doing the same. The back-channels are being facilitated by European and Middle Eastern countries, the people said. Late yesterday, Iranian President Masoud Pezeshkian said the only way to end the war is “recognizing Iran’s legitimate rights, payment of reparations, and firm int’l guarantees against future aggression.” He said he gave that message to the “leaders of Russia and Pakistan.” (Source: bloomberg.com. Italics mine)
