Recently, there have been reports that Iran may be preparing to launch an attack on Israel from Iraqi territory in the coming days, raising global market concerns about escalating tensions in the Middle East. Following the news, oil prices surged. On November 1, Brent crude oil prices rose by over 2%, briefly exceeding $74 per barrel, while U.S. West Texas Intermediate (WTI) also rose, approaching $71 per barrel.
According to two anonymous Israeli sources quoted by Axios, Iran plans to carry out the attack through its allies in Iraq—local pro-Iranian militia groups—using drones and ballistic missiles. The Israeli intelligence services have detected that this attack may heavily involve the use of drones and missile weaponry. A U.S. official stated that if Iran decides to act immediately, Tehran might quickly begin preparations, although it is currently unclear if Iran will ultimately go through with this plan.
On October 31, Major General Hossein Salami, Commander of Iran's Islamic Revolutionary Guard Corps, issued a stern statement warning Israel "not to forget" Iran's recent responses to Israel, and stated that Iran would retaliate against Israel in unimaginable ways. Salami noted that Israel is on the "brink of collapse," acting chaotically and having committed multiple crimes. He reminded Israel that looking back at Iran's treatments of its enemies over the past 45 years, it is not difficult to foresee its future reactions.
On the same day, the Israeli Defense Forces announced the establishment of a special unit within Mossad and the Air Force Intelligence to quickly act against Iran if necessary. Israel warned that if Iran attacks again, it will respond with "very severe" retaliation. Previously, Israel carried out a missile strike against Iran on October 1 but did not target Iran's nuclear facilities or oil fields, causing the "war premium" to dissipate quickly. The market's focus then shifted towards the underlying weaknesses in oil supply fundamentals.
However, Standard Chartered Bank cautioned the market against becoming complacent about the Middle East situation, arguing that market sentiment is overly optimistic, ignoring the potential risks of Middle Eastern conflict. The current situation indicates that although neither side wants to risk a broader conflict, the tensions in the Middle East remain hard to overlook.
