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Global oil prices rose after the top commander of Iran’s elite Revolutionary Guards vowed that Tehran would deliver a harsh response to last week’s Israeli strikes on the Islamic republic, sparking fears of further escalation in the region.
Major General Hossein Salami, the head of the guards corps, warned in a speech on Thursday that Iran’s retaliation would be “unimaginable” as Iranian officials stepped up their rhetoric against Israel.
“Israelis think they can launch a couple of missiles and change history,” he said. “You have not forgotten . . . how Iranian missiles opened up the sky . . . and made you sleepless.”
Separately his deputy, Brigadier General Ali Fadavi, told Al Mayadeen, a Lebanese television channel close to Iran, that a response would be “inevitable”. In more than 40 years, “we have not left any aggression without a response”, he said.
Oil prices climbed on Friday on concerns that a new round of hostilities could disrupt global supplies. Brent crude, the international benchmark, was up 2.7 per cent at $74.76 a barrel, the highest price in a week. West Texas Intermediate, the US benchmark, was 2.9 per cent higher at $2.9 per cent.
The belligerent Iranian comments came as Tehran weighs its options following Israel’s attack on Saturday, during which Israeli warplanes launched three waves of strikes at Iranian military installations. The targets included missile factories and air defence systems in three provinces, including in Tehran.
Regime insiders told the Financial Times that the options being considered include a possible strike before next week’s US presidential election, or Iran’s leaders could decide to hold off for now.
“The winner of the US election could take an Iranian attack personally and act against Iran. So, if Iran wants to respond to Israel, the best time is before the US election,” one insider said. “The only thing that could change this would be a fair breakthrough in ceasefire talks between [Hizbollah in] Lebanon and Israel which does not seem very likely.”
The US this week stepped up efforts to broker a deal to end the conflict that has lasted more than a year between Israel and Hizbollah, Iran’s most important proxy.
But there was little optimism of a breakthrough as Israeli Prime Minister Benjamin Netanyahu insisted Israel retain the right to unilaterally enforce any agreement that would lead to Hizbollah withdrawing from southern Lebanon.
Another Iranian insider indicated that Tehran might opt to maintain psychological pressure on Israel rather than launch a direct assault. “With Hizbollah launching tens of rockets into Israel daily in a legitimate war, a direct response may not be necessary right now,” this person said. “What benefits us is not a direct war with Israel. We need to keep the level of people’s stress low so that they can live their lives. This is the top priority.”
But an Iranian analyst said the dilemma for Tehran was “that Israel would take any delay in Iran’s response as a sign of weakness and would feel emboldened”.
Iran’s initial reaction to Israel’s strikes — which were in retaliation for an Iranian missile barrage fired at Israel on October 1 — suggested that Tehran’s response would be measured and not immediate, Iranian analysts said.
Speaking on Sunday, a day after Israel’s attack, Ayatollah Ali Khamenei, Iran’s supreme leader and ultimate decision maker, refrained from vowing to retaliate. Instead, he said the strikes should neither be “overestimated or underestimated”.
Iranian state media played down the impact of the attack, which killed four soldiers and a civilian, saying the damage was limited.
But Tehran has shown a willingness to risk an escalation with Israel as regional hostilities triggered by Hamas’s October 7 2023 attack have spread across the Middle East, thrusting Iran’s years-long shadow war with its regional enemy into the open.
In April, it fired more than 300 drones and missiles at Israel in a clearly telegraphed retaliation for an Israeli strike on Tehran’s embassy compound in Syria, which killed several senior guards commanders.
It gave little notice before launching 180 ballistic missiles at Israel on October 1, a more severe attack that was in response to the Israeli assassination of Hassan Nasrallah, Hizbollah’s leader and a close confidant of Khamenei.
“Only a shock can stop Israel from its aggressions and free the region from the current stalemate,” the first regime insider said. “Iran might even go for a big bang and do something totally outside Israelis’ calculations as there is no other way to stop it.”
The US, which has pledged an “ironclad” commitment to the defence of Israel, has warned Iran not to retaliate as western nations have sought to contain the crisis amid heightened fears of all-out war.
“We will not hesitate to act in self-defence. Let there be no confusion. The United States does not want to see further escalation,” Linda Thomas-Greenfield, the US ambassador to the UN, said this week.