Suleimani Killing Sparks Fear of War and Economic Turmoil

Oil markets expect escalation in wake of U.S. strike on Iranian general.

BY KEITH JOHNSON, LARA SELIGMAN | JANUARY 3, 2020, 7:43 AM

Iranians burn a U.S. flag during a demonstration in Tehran following the killing of Islamic Revolutionary Guard Corps Maj. Gen. Qassem Suleimani

Crude oil prices soared after Iran vowed “harsh retaliation” for a Friday morning U.S. airstrike that killed the Iranian general Qassem Suleimani, one of the most powerful officials in Iran and the architect of Tehran’s terrorist campaigns around the region.

The escalation in recent days between the United States and Iran is now entering a dangerous new phase, with Iran expected to launch both short-term reprisals, especially against U.S. forces in Iraq, and a longer-term acceleration of its efforts to acquire nuclear weapons.Trending Articles

U.S. Strike Kills One of Iran’s Most Powerful Military…

Qassem Suleimani’s death could mark the most dramatic escalation of the Middle East conflict since the Iraq War.

Iran’s Supreme Leader, Ayatollah Ali Khamenei, said that Iran would respond to the U.S. strike with “harsh retaliation,” while a former commander of Iran’s Islamic Revolutionary Guard Corps vowed“vigorous revenge.” Iranian Foreign Minister Mohammad Javad Zarif lambasted on Twitter what he called a “dangerous & a foolish escalation” of tensions between the two countries.

“The strike that killed Qassem Suleimani is a significant escalation in the current tensions between Iran and the United States,” said Michael Mulroy, who until last month served as the Middle East policy chief for the U.S. Department of Defense.

“He is considered a national hero in Iran and one of the most popular senior leaders despite running a clandestine organization. It is likely that Iran will feel compelled to respond by both overt and covert action against the United States and our interests. This response or responses could happen anywhere,” said Mulroy, now an analyst with ABC News.

Russia’s foreign ministry and top politicians also criticized the U.S. strike, authorized by President Donald Trump, and said that it would increase the possibility of regional conflict.

The specter of Iranian reprisals spooked the oil market, with prices for Brent crude jumping more than 4 percent in early trading Friday to just shy of $70 a barrel. Analysts fear that Iran will resume attacks on regional oil infrastructure, following earlier strikes on oil tankers near the Strait of Hormuz and a September 2019 drone and missile strike on a key Saudi oil facility that temporarily knocked outhalf of Saudi oil production.

“Iran will also likely resume harassment of commercial shipping in the Gulf and may launch military exercises to temporarily disrupt shipping,” said Henry Rome, an Iran analyst with the Eurasia Group, in a note. Such actions, or the spread of conflict to the oil fields in southern Iraq, could send crude prices closer to $80 a barrel, he said.

At the same time, Iran could further accelerate its uranium enrichment capabilities, after already taking a significant step to quicken its nuclear breakout capacity in November 2019. The latest steps may have already shaved Iran’s nuclear breakout time to four to seven months, said ClearView Energy Partners in a note. That nuclear acceleration, on top of any Iranian strikes on regional energy infrastructure, could threaten Israel and “could add to the risk of regional conflict, further pressuring crude to the upside,” ClearView said.

Israeli Prime Minister Benjamin Netanyahu cut short a trip to Greece on Friday and put the Israeli military on high alert.

The U.S. strike that killed Suleimani and another top Iranian militia commander at the international airport in Baghdad came in response to an assault on the U.S. Embassy in Iraq by Iranian-backed militias. That was itself a response to U.S. strikes in late December that killed more than two dozen Iranian-backed fighters in retaliation for the Iranian killing of a U.S. military contractor near Kirkuk, Iraq, in late December 2019. The latest escalation is the sharpest since Trump called off a military attack on Iran in response to Iran’s September 2019 strike on the Abqaiq oil facility in Saudi Arabia.

U.S. Strike Kills One of Iran’s Most Powerful Military Leaders

Qassem Suleimani’s death could mark the most dramatic escalation of the Middle East conflict since the Iraq War.REPORT | MICHAEL HIRSH

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Several U.S. lawmakers, while shedding no tears for the death of the man who for two decades spearheaded the Islamic Revolutionary Guard Corps and the Quds Force and sowed terrorism throughout the Middle East, criticized Trump’s unilateral action and warned that it raised the possibility of major conflict.

Since pulling out of the 2015 nuclear deal with Iran in May 2018, “this president has unfailingly raised tensions with Iran, and his latest act puts Americans at risk by all but inviting retaliation against U.S. and allied interests inside and outside of Iraq,” said Sen. Ben Cardin, a Maryland Democrat on the Senate Foreign Relations Committee. Like House Speaker Nancy Pelosi, Cardin criticized the lack of presidential consultation with Congress before launching the decapitation strike.

The State Department advised U.S. citizens to leave Iraq in the wake of the Iranian threats of reprisals. U.S. Secretary of State Mike Pompeo, who early Friday said the U.S. strike was motivated by intelligence that Suleimani was planning further attacks, spoke with his counterparts in the United Kingdom and Germany, and he said the United States was committed to deescalating tensions with Iran.

Britain echoed calls for moderation.

“We have always recognised the aggressive threat posed by the Iranian Quds force led by Qasem Soleimani,” said U.K. Foreign Secretary Dominic Raab in a statement. “Following his death, we urge all parties to de-escalate. Further conflict is in none of our interests.”

Iraq reacted harshly to the U.S. airstrike, calling it a violation of the country’s sovereignty and a breach of the terms under which U.S. troops can operate in Iraq. Analysts said that rising tensions between Washington and Baghdad, coupled with the threat of more Iranian attacks on U.S. troops and facilities in Iraq, could make the continued U.S. presence there increasingly inviable. Charles Lister of the Middle East Institute said the strike could increase parliamentary pressure in Baghdad to expel U.S. troops from the country.

Some regional experts said that the U.S. attack, while eliminating a powerful force in Iran’s regional ambitions, risks setting off a chain of unpredictable events.

“Suleimani was reprehensible, so it isn’t about him but rather whether the administration sufficiently thought through the range of potential knock on effects—like outright conflict with Iran, putting U.S. citizens in the region at greater risk, revocation of basing and overflight access in Iraq, etc.—and what that might lead to,” said Becca Wasser, an expert at the Rand Corp.

“You don’t open Pandora’s box without having thought about what is inside and how you can handle what could be in there,” she said.

While most analysts expect Iran to shy away from a full-scale showdown with the U.S. military, they do expect to see more attacks by the Islamic Revolutionary Guard Corps and Iran-backed militias inside Iraq. At the same time, Iran-backed terrorist proxies such as Hezbollah could undertake destabilization operations across the region.

“We expect moderate to low level clashes to last for at least a month and likely be confined to Iraq. Iranian-backed militias will attack U.S. bases and some U.S. soldiers will be killed; the U.S. will retaliate with strikes inside of Iraq,” said Eurasia Group’s Rome.

But a bigger potential threat is the acceleration in Iran’s quest for a nuclear weapon. Since the Trump administration withdrew from the nuclear pact, Iran had taken only gradual steps to increase its uranium enrichment capacity and maintained hopes that the remaining countries in the deal could somehow salvage it, though by stockpiling more uranium than allowed under the accord, it made it easier to develop a bomb.

However, in November 2019, Iran stepped up its enrichment activities at its underground, fortified Fordow facility, shortening its breakout time to stockpile enough highly enriched uranium for a bomb. European Union foreign ministers, like Pompeo, condemned the latest breach of Iran’s commitments under the terms of the accord and warned that they could seek formal dispute settlement, which could finally scuttle the 2015 pact.

Keith Johnson is a senior staff writer at Foreign Policy. Twitter: @KFJ_FP

Lara Seligman is a staff writer at Foreign Policy. Twitter: @laraseligman VIEW
COMMENTSTAGS: ENERGY, IRAN, IRAQ, MIDDLE EAST, OIL, TERRORISM

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Suleimani Killing Sparks Fear of War and Economic Turmoil

Oil markets expect escalation in wake of U.S. strike on Iranian general.

U.S. Strike Kills One of Iran’s Most Powerful Military…

Qassem Suleimani’s death could mark the most dramatic escalation of the Middle East conflict since the Iraq War.

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