How severe will Israel’s reprisal attack on Iran be?
• A geopolitical expert says full-on conflict in the Middle East will disrupt 30% of global oil supply
The former US ambassador to Saudi Arabia and commander of US Central Command, John Abizaid, says Iran must brace itself for a retaliatory attack by Israel in a move he says puts many Arab states in a catch 22 scenario.
Abizaid, who currently serves as a senior adviser for Lazard Geopolitical Advisory, said all indications pointed to Israel biding its time to prepare an attack on Iran.
“The Arab states are now going to be faced with a dilemma. The Iranian diplomacy and pressure will become intense upon the states that are essential for overflight in order for Israeli forces to get to Iranian targets,” Abizaid told the Lazard Asset Management webinar on Monday night.
“Places like Jordan and Egypt are under great pressure at home because citizens are very much against what the Israelis are doing in Gaza.
“There are a lot of pressure points that the Iranians can look to that are not necessarily obvious. It is going to get worse a bit before it gets better,”
“When I was ambassador in Saudi Arabia, the Saudis were hit by over 300 missile and drone attacks launched by the Iranians or their proxies. It is not inconceivable that the Iranians will look to pressure the Saudis and the Emiratis by threatening their oil supply.”
Lazard is a global financial advisory and asset management firm with assets under management of about $250.4bn. It was founded in 1848, offering a range of services including financial advisory, asset management, and strategic consulting to a diverse clientele that includes institutions, corporations, governments, and individuals.
Abizaid was appointed by former US president Donald Trump as ambassador to the oilrich Saudi Arabia in 2019 and served in the role until 2021.
From 2016 to 2018 he served as the senior adviser for the secretary of defence to the Ukrainian minister of defence.
Lazard’s webinar looked into the current situation in the Middle East, geopolitical developments and potential economic implications of the escalating tensions between Israel and Iran.
Israel’s military chief Herzi Halevi has said that Iran’s attack on the country “will be met with a response”.
Iran fired more than 300 drones and missiles at Israel on Saturday in retaliation to Israel’s bombing of Iran’s diplomatic complex in Syria.
Iranian-Israeli tensions have long simmered in the shadows of the broader Middle East. Iran has, since the 1979 revolution, taken an anti-Israeli posture and as part of its deterrence strategy.
Theodore Bunzel, head of Lazard Geopolitical Advisory, said the real way Iran-Israel tension could disturb the global economy was if the supply of oil through the Persian Gulf, through which 30% of the world’s oil exports travelled and 20% of LNG was disrupted by military activities.
He said this would drive up oil prices and supply in a way that the Israel and Gaza conflict thus far had not.
“Just to be clear, we as a team think Israel will strike Iran directly. And other options [sanctions] are incremental to the action that Israel could potentially take directly against Iran in retaliation steps. The question will be the scope and severity of Israel’s direct response,” Bunzel said.
“If it is precise and targeted at certain Islamic Revolutionary Guard Corps assets rather than some of the crown jewels like the nuclear facilities in a really ambitious strike, Iran has a couple of ways it could respond,”
“We do think that Israel will attack, but that doesn’t necessarily mean it automatically spirals out of control. There will be an opportunity depending on the severity of Israel’s attack for Iran to take a de-escalatory step in response.”