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SECURITY: Israeli Response To Iran May Be More Aggressive Than US Would Want

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The Middle East remains braced for an Israeli response to Iran, with an uncharacteristically tight press environment offering limited details on yesterday's Israeli Security Cabinet meeting. Amichai Stein notes on X: "...there was no vote either on the outline of Israeli action in Iran or even on the authorization of [Prime Minister] Netanyahu and [Defense Minister] Gallant to accept the decision."

  •  Axios reported overnight: "The Biden administration accepts that Israel will soon launch a major attack on Iran, but it fears that strikes on certain targets could dramatically escalate the regional war... The current plans are still a bit more aggressive than the White House would like, a senior Israeli official said.”
  • A senior Israeli official told reporters that the gaps between the US and Israel on acceptable Iranian targets "have narrowed," but Stein notes, "the US still thinks the response is a bit too much."
  • Discussions are expected to continue in the coming days, with Defence Minister Yoav Gallant likely to travel to Washington next week for meetings with counterpart Lloyd Austin and NSA Jake Sullivan.  
  • The primary risk for markets may be an escalatory cycle that threatens regional energy infrastructure. Marc Polymeropoulos at the Atlantic Council notes that the US and Israel getting on the same page "is important", but those in Israel who favour a stronger response, "may still get their way, because escalation ladder in effect."
  • Bob McNally at Rapidan Energy Group notes: “We’re probably getting into a cycle of Israel on Iran, you know, volleys, if you will, and attacks. And once that gets going, all bets are off.”
  • Recent Iranian-Saudi rapprochement may have lowered the risk of an Iran-Gulf conflagration slightly, but a suspected Iranian drone and cruise missile attack on Saudi oil facilities in 2019 offers precedent for escalation if the Gulf states are seen by Iran and proxies as complicit in an Israeli attack.
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The Middle East remains braced for an Israeli response to Iran, with an uncharacteristically tight press environment offering limited details on yesterday's Israeli Security Cabinet meeting. Amichai Stein notes on X: "...there was no vote either on the outline of Israeli action in Iran or even on the authorization of [Prime Minister] Netanyahu and [Defense Minister] Gallant to accept the decision."

  •  Axios reported overnight: "The Biden administration accepts that Israel will soon launch a major attack on Iran, but it fears that strikes on certain targets could dramatically escalate the regional war... The current plans are still a bit more aggressive than the White House would like, a senior Israeli official said.”
  • A senior Israeli official told reporters that the gaps between the US and Israel on acceptable Iranian targets "have narrowed," but Stein notes, "the US still thinks the response is a bit too much."
  • Discussions are expected to continue in the coming days, with Defence Minister Yoav Gallant likely to travel to Washington next week for meetings with counterpart Lloyd Austin and NSA Jake Sullivan.  
  • The primary risk for markets may be an escalatory cycle that threatens regional energy infrastructure. Marc Polymeropoulos at the Atlantic Council notes that the US and Israel getting on the same page "is important", but those in Israel who favour a stronger response, "may still get their way, because escalation ladder in effect."
  • Bob McNally at Rapidan Energy Group notes: “We’re probably getting into a cycle of Israel on Iran, you know, volleys, if you will, and attacks. And once that gets going, all bets are off.”
  • Recent Iranian-Saudi rapprochement may have lowered the risk of an Iran-Gulf conflagration slightly, but a suspected Iranian drone and cruise missile attack on Saudi oil facilities in 2019 offers precedent for escalation if the Gulf states are seen by Iran and proxies as complicit in an Israeli attack.