The world is dangerously close to a massive escalation in the Iran war, as Trump has threatened to strike Iran’s infrastructure, including energy, power and bridges.
Iran has pledged to attack the energy infrastructure and possibly desalization infrastructure of gulf neighbors in response.
Trump set a deadline for 8 pm ET on Tuesday to open Hormuz or face the destruction but Israel has already moved to strike at Iran’s energy.
Defence minister Israel Katz today said his military struck Iran’s largest petrochemical complex at Asaluyeh. Fars news agency reported that ‘several’ sites had been struck.
Tansim reported that companies that provide electricity, water and oxygen to Asaluyeh were
attacked, but the facility itself was not damaged. That may be an aim to carefully tread the fine line towards an escalation that’s in almost no one’s interest (except Russia).
Last month, Israel attacked Iran’s South Pars gas field and Iran responded by attacks on gulf energy, including a crippingly strike on part of Qatar’s LNG operation. That could take five years to repair, according to Qatar’s national energy company and lead to a 17% drop in production.
Just now, there are reports of large explosions in Kuwait, which has been particularly hard hit by Iran in this war.
So far, the market isn’t panicking on this attack because there are some hopes for a ceasefire or peace deal in light of Trump extending his deadline for a third time. WTI crude is down 90-cents to $110.86 after a big jump on Thursday.
The market is undoubtedly on edge about war developments and this week feels like a critical moment because if Iran’s power grid is attacked, it’s hard to imagine them willingly opening the Strait of Hormuz any time soon.
S&P 500 futures are up 0.1% and European markets are mostly closed for Easter Monday.
This article was written by Adam Button at investinglive.com.