With its publication, Bloomberg attempted to analyze the new scenario that has taken shape in the Middle East after the direct conflict between Israel and Iran. He writes that the two rivals appear more willing to fight each other directly rather than through proxies, and that, US government officials and experts fear, could lead to open war.
“Last week was a game changer” after the attacks between Israel and Iran
“Last week was a game-changer,” said Susan Maloney, a former State Department official who is now a vice president at the Brookings Institution. Iran’s massive missile attack on Israel six days ago “changed the nature of this conflict and I don’t see it changing again, even though the Israelis were very, very measured in their response,” he said.
Oil prices fell on Friday and markets appeared relatively flat after it became clear that the blow to Iran was much more limited than initially seen. Publicly, Israel’s allies were pleased that Friday’s strikes were so minor, even as Prime Minister Netanyahu rejected their calls not to retaliate at all after he managed to almost completely neutralize Iran’s unprecedented missile attacks last weekend. .
Concern about the next moves of Iran and Israel
But that calm belies a deeper concern among American and other officials. A senior European official warned that the situation remains very tense, with no certainty that a flare-up can be contained if the conflict flares up again between Iran and Israel in the coming days.
Business concerns about the situation rose to the highest levels this week since the Oct. 7 attacks, according to a survey by Oxford Economics.
“If there is a serious escalation – meaning a much wider regional escalation than we’ve seen so far – then yes, we could have a serious oil shock,” Gita Gopinath, first deputy managing director of the International Monetary Fund, told TV by Bloomberg. “But we’re not there yet.”
But at the Fund’s annual meetings in Washington this week, some officials worried that their colleagues were in denial about the dangers posed by the conflict, which could still widen.
One of the big questions now is whether the Netanyahu government will feel compelled to continue hitting Iran. The latest flare-up followed an April 1 missile attack that killed Iranian military commanders at a diplomatic compound in Damascus. Tehran blamed the incident on Israel, which has not confirmed it was responsible.
Iran made it clear that it was ready to do something it had never dared to do before: fire hundreds of missiles and drones at Israel from its soil. Although many of the weapons failed, it took the help of the US and the UK for Israel to neutralize the attack. This sent the ominous message that Israel would not be able to repel an invasion on its own.
The US had worked frantically to convince Netanyahu to accept that he had won and not continue. And given the limited nature of Thursday night’s attack, he may have heard it, at least for now. However, Netanyahu has also shown a habit of ignoring the US in the past, Bloomberg writes.
This was most clear in the ongoing war in the Gaza Strip, which Israel launched after the October 7 attack that killed around 1,200 people. Retaliation by Israeli forces has killed more than 30,000 people, according to Hamas, and has brought Israel under heavy criticism from the rest of the world.
A “new Middle East”
Iran’s missile attack had deflected some of those concerns, but an impending attack on Rafah, the next Gaza city on Israel’s target list, could reignite them. Ceasefire talks, meanwhile, have stalled. Even the Qatari mediator said this week that he was reassessing his role.
Calls for restraint were not limited to Israel’s allies. Russia has hailed this week’s limited standoff as evidence that neither side wants escalation. But even if the choreographed attacks caused relatively little damage, they sent ominous messages.
“It’s a new Middle East, a Middle East in which Israel has to ask every day whether any action could trigger an Iranian missile attack or a drone attack on Israeli soil immediately,” said Norman Roule, a former senior official of the US Secret Service, on Bloomberg Television.
Among the points raised by diplomats in Tel Aviv to de-escalate Israel’s expected response to Iran’s strike last week was the possibility of a full escalation of hostilities on the border with Lebanon, where Hezbollah is active, according to a senior Western official.
“With Iran and Israel engaged in direct mutual attacks, the risk of a wider war has increased,” Bloomberg economist Ziad Daoud wrote. “This could happen by design – through a gradual escalation of the cycle of violence – or as a result of miscalculations. Whatever the cause, the effects on the global economy will be enormous.”
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