Since Iran launched 180 ballistic missiles to target Israel on 01 October 24, there has been speculation of Israeli counter-strike. The 01 October strike was Iran’s second direct attack on Israel within six months. It was a face-saving response to a series of high-profile assassinations by Israel. 

In a video statement immediately following the 01 October attack, Israeli Prime Minister Netanyahu vowed to exact reprisals, stating, “Iran made a big mistake tonight, and it will pay for it. The regime in Iran does not understand our determination to defend ourselves and to retaliate against our enemies.”

Washington Post, citing key officials, wrote that Netanyahu had told the Biden administration that he was willing to strike military rather than oil or nuclear facilities in Iran, suggesting a more limited counter-strike aimed at preventing a full-scale war.

Many factors are at play, including the US Presidential elections, a major escalation of conflict, and the economic impact of such strikes. It is time to assess the implications.

US Presidential Election Dynamics

Israel’s counter-strike plans against Iran are reportedly ready. Some US officials predict the attack will happen before the US election.

The Israeli retaliatory strike could put the growing conflict in the Middle East on center stage for US voters before they head to the polls on November 5.

Netanyahu is conscious of the political effects of such a strike. Therefore, Israel’s strike on Iran would be done to avoid “political interference in the US elections.”

While Netanyahu has vowed to make Iran “pay” for the Oct. 1 missile attack, he has assured President Biden that the Israeli response would be limited to military targets rather than oil refineries or nuclear plants.

The Biden-Harris administration had publicly stated its opposition to an Israeli strike on Tehran’s oil and nuclear sites, fearing it could spark all-out war in the region.

A strike on oil installations would raise gas prices. Voters have historically blamed the party in power, which could hurt Vice President Kamala Harris in the election. Similarly, wars tend to be electorally bad for the incumbent, so the Biden-Harris administration is motivating itself to try to de-escalate the war in the Middle East.

The humanitarian crisis in Gaza, where some 42,000 Palestinians have been killed in the last year, has already emerged as a major issue, especially for young Democratic voters.

Arab-American voters in Michigan are repulsed by the administration’s stance on Gaza. It is a swing state where the narrowest margins could matter. Biden administration has threatened to pause military aid to Israel if it fails to facilitate more humanitarian aid to the decimated Gaza enclave or makes an unprecedentedly massive strike on Iran.

Yet the US has authorized the deployment of the THAAD anti-ballistic missile system. Interestingly, Netanyahu has no incentive to hold back the attack. He’d probably be happy to see Trump back in the White House. Yet he may be forced to hold back.

Israel-Iran Complex Relations

There are serious religious and ideological differences between staunchly Shia (Islam) Iran and the predominantly Jewish state of Israel that fuels mutual suspicion and animosity.

These grew worse post-1979 revolution when the Islamic Republic severed diplomatic ties with Israel, labeling it “Little Satan.” Shia clerics in Iran view the Old City of Jerusalem as a holy site and oppose its Israeli control.

Iran supports Palestinian causes, backing groups like Hamas and Hezbollah, which Israel designates as terrorist organizations. Iran’s calls for the destruction of Israel exacerbate tensions.

Iran’s Nuclear Program

Commencing in the 1950s with support from the US under the Atoms for Peace program, Iran’s nuclear program was geared toward peaceful scientific exploration. In 1970, Iran ratified the Non-Proliferation Treaty (NPT), subjecting its nuclear activities to IAEA inspections.

After the 1979 Iranian Revolution, cooperation ceased, and Iran pursued its nuclear program clandestinely. In November 2011, the IAEA reported credible evidence that Iran had been conducting experiments aimed at designing a nuclear bomb.

Operational since September 2011, the Bushehr I reactor marked Iran’s entry into nuclear power with Russia’s assistance. This became an important milestone for Rosatom to become the largest player in the world nuclear power market.

In October 2023, an IAEA report estimated Iran had increased its uranium stockpile 22 times over the 2015 agreed JCPOA (Joint Comprehensive Plan of Action) limit. Iran is reportedly very close to an atomic bomb.

This, combined with Iran’s very advanced ballistic missile program, makes a lethal cocktail. Iran possessing a nuclear weapon would have implications for all nations of the region and beyond.

Israel perceives Iran’s nuclear ambitions as an existential threat, fearing potential nuclear weapons development. Israel has criticized the Iran nuclear deal and undertaken covert operations to disrupt Iran’s nuclear activities.

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Iran’s Key Nuclear Sites

Iran’s nuclear program includes several key sites. The Bushehr Nuclear Power Plant is Iran’s first nuclear power plant. The 1,000-megawatt facility, located on the Persian Gulf coast, started operations in 2011. Iran wants to increase its capacity to 3,000 megawatts.

The Natanz Uranium Enrichment Facility, considered Iran’s largest site, has been the target of sabotage attempts allegedly by the US and Israel.

The underground Fordow Uranium Enrichment Facility, whose existence was revealed to the International Atomic Energy Agency (IAEA) in 2009, and the Arak Heavy Water Reactor were temporarily shut down under the 2015 nuclear deal but reactivated in 2019.

Iran has a large nuclear technology center on the outskirts of Isfahan, its second-largest city. It includes the Fuel Plate Fabrication Plant (FPFP) and the Uranium Conversion Facility (UCF), which can process uranium into uranium hexafluoride, which is fed into centrifuges.

Iran has a partially built heavy-water research reactor originally called Arak and now Khondab. Under the 2015 agreement, construction was halted, and the reactor’s core was removed and filled with concrete to make it unusable.

Iran’s Key Oil Facilities

Iran’s most important oil export capability lies in Kharg Island in the Persian Gulf, 25 kilometers off the country’s coast. It hosts massive storage tanks and serves as the country’s primary oil export hub.

In the oil-rich Khuzestan province in southwestern Iran, the Abadan Refinery stands as Iran’s largest oil facility, with a daily processing capacity of about 630,000 barrels.

The refinery had suffered heavy damage during the Iran-Iraq War in the 1980s. Asaluyeh terminal in Bushehr province, located near the South Pars gas field, which Iran shares with Qatar, is one of the country’s largest gas production sites.

The Isfahan Refinery, with its daily capacity of 375,000 barrels, is vital to meet Iran’s domestic petroleum needs. Similarly, the Bandar Abbas Refinery, processing 350,000 barrels daily, is considered one of Iran’s largest refineries. The Tehran Refinery, located south of the capital, has a daily refining capacity of approximately 250,000 barrels.

Israeli Targets and Likely Strike Modalities

Depending on the level of escalation, Israelis would strike a different set of targets. The lowest level of retaliation would be military targets.

Many Iranian underground missile bases are nearly 500 meters deep. The bases contain road-mobile transporter erector launcher trucks, along with other hardware. Iran has created missile bases in various provinces and cities.

The underground facility, whose location is unknown, is a “complex system of enormous tunnels.” Iran could use these bases for “a surprise barrage missile attack.”

Some of the key ones are Khorramabad Underground Missile Base (Lorestan), Kenesht Canyon Underground Base North (Kermanshah), and Panj Pelleh Underground Missile Base (Kermanshah).

Israel could target major Iranian airbases, the Islamic Revolutionary Guard Corps (IRGC) assets, and regular military assets.

From Israel’s point of view, hitting the Iranian nuclear program is very important, but the same may be postponed for the time being. Similarly, Israel is unlikely to make a large-scale attack on oil installations. If Israel were to strike key Iranian oil installations, it could provoke a significant military response from Iran.

Israeli attacks would include air strikes using air-launched cruise missiles, and there would be ballistic missile attacks. Israel has five Dolphin-class submarines that have four larger torpedo tubes capable of launching Israeli-built Popeye Turbo cruise missiles. Israel has a significant number of ships with cruise missiles.

As a backup, the US has a great air and sea-based presence in the region. The US has increased its military presence in the Middle East to nearly 43,000 troops under Central Combatant Command.

The US has military bases in Jordan, Saudi Arabia, UAE, Oman, Iraq, and Qatar, among others. Additional ships and aircraft have been moved in. There has been a rare presence of two aircraft carriers.

The US Air Force sent an additional squadron of advanced F-22 fighter jets in August, bringing the total number of land-based fighter squadrons in the Middle East to four. The US has been using stealth bombers to target Houthi terrorists, and the Terminal High Altitude Area Defense (THAAD) system has been deployed.

The US has also bombed Houthi targets using B-2 stealth bombers. Many experts have called it a direct warning to Iran.

China, which has significant energy ties with Iran, will be closely observing developments. The outcome of this conflict may influence international energy strategies and alliances, potentially reshaping the geopolitical landscape.

Implications Of Iran-Israel Conflict

Iran is a member of Organization of the Petroleum Exporting Countries (OPEC), produces approximately 3.2 million barrels per day (bpd), constituting about 3 percent of global output.

Despite US sanctions, Iranian oil exports have surged, primarily due to demand from China. Other OPEC members do have spare capacity. Saudi Arabia could increase output by up to 3 million bpd, and the UAE by about 1.4 million. Even the US can contribute significantly.

A full-scale conflict between Iran and Israel would disrupt shipping and other trade routes crucial for India’s trade with Europe, the US, Africa, and West Asia. The Red Sea and Suez Canal are vital routes.

The Red Sea crisis and actions by Houthi rebels have already affected trade through the Red Sea. India exports a significant amount of refined petroleum products to Europe and other commodities like tea, textiles, and engineering products. As shipping routes become longer due to conflict-related diversions, costs have increased by 15-20 percent.

Extended conflict will affect the progress of the India-Middle East-Europe Economic Corridor (IMEC) and the International North-South Transport Corridor (INSTC).

The ongoing conflict has led to a spike in global crude oil prices, with Brent crude nearing $75 a barrel. As Iran is a major oil producer, any military escalation could disrupt oil supplies, further pushing prices upward. India relies heavily on oil imports, and more than 80 percent of its oil needs come from abroad.

India is Israel’s second-largest trading partner in Asia. India-Israel trade has doubled over the last five years to $10.7 billion in 2022-23. FY 2023-24 has already seen a decline due to the Israel-Hamas conflict. India’s trade with Iran has contracted over the past five years, amounting to just $2.33 billion in 2022-23.

To Summarize

Many in Israel argue that Israel should seize the moment to launch a more comprehensive attack on Iran’s nuclear capabilities, calling it a “once-in-a-lifetime opportunity.”

The Israeli attack would also “restore balance and deterrence” in the region. But Netanyahu’s approach seems to have mellowed down a little and will avoid full-scale war, opting instead for a “limited” military operation.

Israeli Defence Minister Yoav Gallant declared their response would be “precise, painful, and surprising.” However, Gallant also stated that Israel is not interested in opening “additional fronts or new conflicts.”

Israeli officials expressed concerns that delaying the strike could embolden Iran. Yet, despite assurances, Israel’s track record of deviating from prior agreements complicates Washington’s confidence in its diplomatic leverage.

Netanyahu’s office made it clear in a post: “We listen to the opinions of the United States, but we will make our final decisions based on our national interest.”

For the Gulf Arab states, the Israel-Iran war is an existential threat. There are reports of Iranian proxies already threatening UAE and Saudi oil installations.

While publicly, the Gulf Arab states are committed to dialogue and diplomacy, if they are attacked by Iran or Iranian proxies, they would probably seek US and Israeli assurances and likely be willing to join hands against Iran.

Recent US-Iranian diplomatic efforts are aimed at reviving nuclear talks. With the election of Iranian President Masoud Pezeshkian, a reformist who has shown interest in reopening negotiations with the West, a military strike could derail any possibility of diplomacy.

The United States has maintained publicly for years that Iran could reconstitute its nuclear program relatively quickly, even if attacked. However, getting to a new deal between Iran and the United States and its partners is going to be very difficult.

Domestically, the Iranian political regime is suffering from a serious crisis of legitimacy. The “Women, Life, Freedom” movement erupted following the death of Mahsa Amini in police custody for allegedly not properly wearing her hijab. There are also dissenting views in Iran that challenge the regime’s anti-US and anti-Israel policy and identity.

The World needs to mediate and get the regional players to assuage each side’s sensitivities and priorities. Israel feels threatened by hostile neighbors. Palestinians need a proper homeland. Iran’s nuclear weapons program can be devastating for the region.

The World is awaiting the US presidential elections, which could hopefully end the Ukraine War and deflate Iran-Israel tensions.

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