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With Iran’s threat against Israel in a direct strike, the tension in the Middle East went up a few notches on the scale of uncertainty, as the United States made it clear once again that it would not be a passive observer if a conflict erupts.

The rising tension came in the wake of the daring attack carried out by Israeli F-35 fighter jets on the building that was adjacent to the Iranian embassy in Damascus, the Syrian capital.

Seven Iranian nationals, along with a few Syrians, died in the attack, two of them were from the elite Iranian IRGC – Republican Guards; they were very high ranking officers.

In response to the attack, Ayatollahs Ali Khamenei, the Iranian  supreme leader, said that Israel will be punished in kind, during an Eid message on Wednesday; he did not imply in what form the retaliation could come; nor did he say whether it was imminent, leaving the ambiguity open to interpretation by military and political analysts.

The supreme leader, however, emphasise the fact that the attack on the building next to its embassy, technically, is an attack on the Iranian soil, perhaps implying that attack will be on a target on Israeli soil.

It is the US intelligence that said yesterday an attack was imminent, perhaps knowing better than anyone else, thanks to its extensive intelligence coverage in the region in multiple forms.

No doubt, the Iranian leadership must be under tremendous pressure from the die-hard followers as well as the IRGC itself for a strong response – at least as a face-saving measure.

Israel has been targeting the IRGC officers, both on the Iranian soil and beyond, even before the war broke out on October 7, 2023, when Hamas launched an unprecedented attack on the Jewish state on its own soil; in this context, what happened this week was nothing new.

The bold move in targeting the top officers of the IRGC, however, was as serious as the Americans taking out its top general, General Qasem Soleimani,  on January 3, 2020 by a drone attack, as soon as he set foot in Iraq on an official visit.

On that occasion, the Iranians threatened the US with retaliation and they kept to their words; a US military base was targeted with a barrage of missiles, causing some injuries, but no death.

It was President Trump who ordered to take out General Soleimani, blaming the latter on a significant number of the deaths of the US soldiers based in Iraq.  When the US base in question was attacked by Iran, much to everyone’s surprise, President Trump refrained from commenting on it at that time; nor did the US launch a counterattack. 

It was President Trump himself who lifted up the veil of secrecy that surrounded the major military event in the Middle East: he simply said recently in a political rally that he had a sort of ‘understanding‘ with the Iranians over the attack, implying that he was assured that the American lives would not be lost in a retaliatory strike; in short, the Iranians had kept their side of the bargain, according to President Trump!

President Trump also said that Israel, although warmed to the idea at first, later backed down, hinting about the displeasure of the former over the ‘U’ turn made by the then Israeli prime minister, Benjamin Netanyahu. 

When the Iranian generals were attacked this week by Israel, there were reports that Iran approached the US through an intermediary, most probably the Swiss diplomats. Neither its content nor the US response is clear.

The US has, however, made it clear to the Iranians – not through intermediaries – but, in public that it neither knew nor involved in any form in the attack in question. It, however, did not appease the Iranians, as the latter blamed it on the US – for not reining in its most trusted ally in the Middle East, Israel.

Against this backdrop, both Israel and the US anticipate an imminent attack on Israeli interests – in some form.

Israel has very clearly said if they were attacked, they would attack Iran on its own soil, implying a major escalation. 

Attacking Israel from Iran is a monumental challenge for Iran: Iran do not posses long-range fighter jets for such a major task; Iran, however, is supposed to have a huge arsenal of medium-range missiles and drones that in theory could reach Israel. 

There is a major obstacle, though. Shia-dominated Iran has to fire them over a couple of  Sunni-dominated Arab countries that could be easier said than done; on one hand, they risk being shot down; on the other hand, such a scenario will be tantamount to a major violation of the skies of the countries in question. Only recently did Iran restore diplomatic ties with some Arab countries.

As an alternative, Iran can use the countries that border Israel such as Iraq and Lebanon, while using its proxies. The two countries will vehemently oppose such a move, though, as they will be next in line of fire.

In short, Iranians have very few options if they decide to attack Israel. 

In addition, the Iranian economy is in the doldrums due to heavy Western sanctions with its currency, Iranian Rial, in free fall in the last few week while losing almost 30% of its value; the inflation, meanwhile, has been skyrocketing with the ordinary citizens being trapped between a rock and a hard place. 

If a major conflict breaks out on the Iranian soil, in this context, how the beleaguered Iranian public would react is anyone’s guess; Iranian authorities may lose the leverage in keeping them submissive by an iron fist.

In this context, Iranians may respond in someway, exactly like they did in the aftermath of the assassination of General Soleimani, as the stakes cannot be higher for the Islamic republic, going on the offensive; staying quiet is not an option either. 

That means, the Iranians authorities will have to get their calculations right before taking on the Jewish state, as the latter can be really ruthless in the event of being under threat. 

The Israelis are well known for pre-emptive strikes throughout the world, not just in the Middle East, against perceived threats.

Meanwhile, the latest tension in the Middle East has caused jitters in the oil and gas markets for obvious reasons. As of 10:40 GMT, the price of WTI, Brent and LNG, liquified natural gas, were at $86.58, $90.89 and $1.89 respectively.

As the tension mounts, the US has sent a top general to meet the Israeli defence minister as a matter of urgency. President Biden, meanwhile, warned Iran that the US commitment to the security of Israel is ironclad. 

With just seven months to go before the US presidential elections, the conflict in the Middle East has left President Biden in a lurch: on one hand, he cannot afford to offend the Left-leaning democrats any more; on the other hand, a major ‘wound’ on Israel will not go down very well in the US history on President Biden’s watch in a favourable light. 

That’s why there are reports of the diplomatic arm being in full swing to persuade Iran not to take drastic measures that will inevitably lead to the US being dragged into the conflict – directly.

All in all, the next few days are crucial for stability of the energy markets in particular and peace in the Middle East in general.

In mathematical proportion to the excitement, the enviably famous
American entrepreneurial spirit has already gone into full swing: the hotel
bookings, closer to the path of totality, have gone up exponentially and so have
the prices; in addition, traders lost no time in springing into action in
promoting related merchandise and of course, safety goggles, while implying
that exercising caution before looking heavenward is a virtue, indeed.   

The excitement that borders on ecstasy is perfectly understandable:
astronomical charts show that there will not be another total eclipse for
twenty years that could be viewed from the US; in the United Kingdom, the next
total solar eclipse will only occur in 2090! Of course, there will be partial
solar eclipses at different global locations in the future, but they cannot
instil the same, inexplicable, magical sentiment of a total eclipse.

A solar eclipse occurs when the Moon blocks sunlight from reaching the
Earth, while moving between the star and our planet. Although the Moon passes
across the region in question many times a year, the occurrence of the three
celestial objects being in the same plane is rare – a necessary condition for a
total solar eclipse: since the orbit of the Moon around the earth is slightly
elevated by a few degrees from the orbit of the Earth around the Sun, they do
not frequently line up to trigger off a full solar eclipse.

Up until the age of reason dawned, humanity’s flawed takes on the
eclipses had been evolving, while giving hilarious overtures for the future
generations to ponder.

The Chinese, for instance, thought that a large celestial serpent was
having an unusually large meal, when the Sun went missing all of a sudden, in
the middle of the day during a total solar eclipse. Understandably, they did
what humanly possible on the surface of the Earth in the dark: they beat pots
and pans, frow dawn to dusk, in order to scare off the invisible dragon in
menacingly high pitch – and succeeded in the pursuit, when the Sun came back!

The Vikings, who ruled over the British Isles in the Middle Ages with an
iron fist, once the Romans left, thought that the total solar eclipse was due
to a tug-of-war between the Sun and the Moon. Having recognized that the Moon
being the weaker of the two, they lent their support by chanting and directing
their poisoned spears at the stronger, the Sun. When the total solar eclipse
ended in a very short period of time, the Vikings could not be happier over
their latent strength that stemmed from the cacophony of the noises, eclipsing
the famous pragmatism that they were renowned for.

Perhaps this may have been the real beginning of the notion associated
with the Brits today: supporting the underdogs, be it in cricket, football,
rugby and sometimes, of course, in military conflicts too, but a bit
controversially.

The Mayans did predict solar eclipses too. Their calendar, however,
ended at a certain point in their defined time, leaving what followed only to
be open to interpretation by the future generations.

Even Sri Lankans, did not fail to make
their own contribution to the annals of history of total solar eclipses: when
the darkness fell all of a sudden on April 8, 1959, forcing animals and birds
into unexpected chaos, some highly ambitious members of the fair sex had been
persuaded to drink a juice made from sweet myrtle, locally known as ‘wada kaha’,
 by questionable medicine men to enhance the
beauty of the vulnerable souls; instead of beautifying the women in question,
they had been forced to make frequent trips on a single day to the hole in the
ground those days, while taking extra measures to hide the embarrassment on
many fronts.

With the arrival of the Age of Reason, the great thinkers managed to
account for the Sun being blocked for a few minutes during a solar eclipse –
finally. Even they, however, could not resist the creation of a bit of drama
associated with the event! They used the term, ‘corona’, believing the
existence of a mysterious glow at the periphery of the Sun, only to be exposed
during a total solar eclipse.

In short, they wanted it to be known as a source of regal connotations –
something that was akin to a crown. 

How Einstein hit the jackpot during a total solar
eclipse

In 1915, Albert Einstein, who has since become a synonym for human
intelligence, proposed his General Theory of Relativity. Einstein, in his
theory, claimed that the attraction of celestial bodies, such as the Sun and
Earth, was not caused by a force, as described by Sir Isaac Newton in his
famous Law of Gravitation.

According to Newton, the force of attraction between any two objects in
the universe, is dependent of the masses of each object in question and the
distance between them: the greater the mass, the greater the force; the smaller
the distance, the greater the force.

Einstein, however, disputed mathematics involved in the equation and of
course, the theory for that matter.

While kicking up a storm – that later grew into a hurricane in a short
passage of time – or in spacetime, to be more precise – in the scientific
circles – and beyond – he claimed that the attraction of planets towards the
Sun was due to space – spacetime, as he did not refer to space and time in
isolation – being warped around the Sun due to its sheer weight, exactly like
the dip of trampoline when someone is at its centre.

When an object passes close to a heavy object in spacetime, said Einstein,
that the object just ‘falls’ towards the latter by virtue of the bendy
‘curvature’ of spacetime, not due to a force of attraction determined by a
mathematical equation, regardless of its simplicity – F = GMm/d².

Even the intellectual giants of the early 20^th century could
not get their heads around the novel concept of space being bent. The existence
of endless mathematical formulae did not help either.

Against this backdrop, the total solar eclipse that occurred on May 29,
2019 came as a bolt from the blue!; it paved the way for the ultimate
verification of Einstein’s untested General Theory of Relativity, taking it off
the hypothetical realm: two expeditions, led by the famous astronomer and
physicist, Arthur Eddington from Cambridge University, were sent to Brazil and an
island off African coast, to study the paths of light from distant stars in the
absence of sunlight during the total solar eclipse in question: three data sets
were collected; two sets were subjected to rigorous analysis by the great minds
at that time, while the third was discarded – that later turned out to be
really controversial – as a catalogue of anomalies.

On November 19, 1919, six months after the total eclipse, Eddington and
the team announced their results that in turn took the world by storm: the
observations were consistent with Einstein’s prediction by the General Theory
of Relativity; light from distant stars did bend while moving closer to the Sun
due to the curvature of spacetime! The measurements were very close, but not
exact.

Not only did the results confirm the much-needed verification of
Einstein’s new idea of spacetime – and its curvature caused by heavier heavenly
objects – but also elevated Albert Einstein to a social status that is normally
akin to a celebrity, something that exists to date.

As far as the total eclipse that is going to take place on Monday is
concerned, unlike our ancestors who saw it as bad omen, it is going to be a
springboard for taking a deep dive into the scientific exploration.

Not only is NASA going to stream the event live, but also planning to
fire rockets into the atmosphere in order to probe the potential changes during
the total eclipse. In addition, citizen scientists beyond the path of totality
are encouraged to take photos and share them with peers and of course, on
social media, to see unexpected developments, if any, during the celestial
spectacle.  

All in all, the total solar eclipse is going to show us that the
potential of heavenly bodies to surprise us and entertain simultaneously,
despite us being in a better state to grasp the endless wonders that they have
been throwing at us since the dawn of time – spacetime, in honour of the great
man, Albert Einstein.  

The price of crude oil shot up slightly at the beginning of this week, only to come down closer to where it had been in the last few weeks. The price of LNG, liquified natural gas, meanwhile saw its biggest drop in its recent history.

As of 18:00 GMT on Friday, the prices of two major benchmarks, WTI and Brent, were at $79.97 and $83.55 respectively; the price of LNG was at $1.84 .

The speculation over yet another production cut, analysts believe, may be the cause of rise in oil price this week. It, however, fell down again as the weekend approached, implying the acute challenges faced in maintaining the sustainability; the crude stock build, reported by the EIA, US Energy Information Administration, may have put a damper on the upward trend too.

The battlefront in Ukraine that lost the attention of the global media at the onset of the war between Israel and Hamas, suddenly grabbed the headlines once again, as the involvement of the US-made fighter jets does not seem to remain in the hypothetical realm any more.

If the Dutch government is going to stick to its daring initiative, the skies above Ukraine – and Russia for that matter too – are poised for a potential showdown in the air, in the next few months.

On December 22nd, the Dutch government headed by Mark Rutte, the acting prime minister, announced the bold move: the Dutch authorities want to deliver 18 F-16 Falcon fighter jets to the beleaguered Ukrainian government to defend its skies from relentless Russian attacks that take place in multiple forms – almost on daily basis.

Although the decision is yet to be finalized – and to be blessed by the US, the country of origin of the state-of-the-art fighter jets – it was a dramatic escalation in the Western military assistance.

If F-16 are to be airborne in the Ukrainian skies, they will be the focus of the formidable Russian S-400 air defense system on the ground. The looming threat against the F-16 fighter jets from the latter and the attempts made by the former to wriggle out of risky domains are going to attract defense analysts to a new military theater in droves.

The heavy use of F-16s in the war against Hamas by the Israeli Defense Forces, IDF, elevated the fearsome reputation of the aircraft to new heights: the breathtakingly-potent versatility is certainly without a match; not only can she carry missile and bombs, but also can fire canons at aircrafts, ground targets and even radar installations.

Ukrainians have been demanding the F-16s since the early stages of the conflict, only to be turned down by the US, fearing a direct conflict between Russia and the NATO. With the latest encouraging news, the Ukrainians believe that they can tip the scales against their nemesis, Russia, by taking on their modern fighter jests, air defense systems and even missile launching sites.

Military analysts, however, believe it is easier said than done. They hold the view that Russia is not Hamas. As for the latter, there was no air defense system to speak of and the F-16s never faced a significant challenge from the ground. In addition, Israeli fighter pilots are well trained and their attention to detail is without a match; you hardly hear about an accident in the air involving Israeli fighter jets, perhaps as they are in the fighting mode throughout the year by default.

Russia’s S-400 system, nicknamed “Triumf,” stands sentinel, casting a long shadow over the air dominance anticipated with the arrival of F-16s. The fact that it has been acquired even by a major NATO member speaks for itself: Turkey bought the S-400 system, much to the irritation of major NATO members that in turn deprived the former acquiring F-35 stealth fighter jets from the US.

In addition, in an ironic geo-political twist, both China and India have bought the system for their corresponding air defense tasks, while being literally at war for long months. Saudi Arabia and Qatar have shown an interest in acquiring them too, but stopped short of buying them as yet, not to annoy their ally, the US.

In this context, the Ukrainian theatre may become a potential market place for showing off rival weapons systems for prospective buyers, although there are undeniable risks for both stakeholders of the respective weapons.

Despite the S-400’s bite, the potential benefits of the F-16s remain undeniable. According to independent analysts, they could provide much-needed air superiority, enabling Ukraine to more effectively counter Russian aerial assaults and support ground operations. This, in turn, could boost morale and potentially even shift the momentum of the war, pushing Russia to reconsider its objectives. An outright victory, however, they believe is way off.

The path to Ukrainian skies for these F-16s, however, remains riddled with numerous obstacles. Beyond export permits and pilot training, the S-400 adds another layer of complexity that needs to be overcome to take the move beyond the aspiration stage: suppressing or evading its detection and engagement capabilities will be crucial for the F-16s’ survival and effectiveness; techniques like electronic warfare, low-altitude flight paths, and coordinated attacks are some form of counter measures that could be used to mitigate the threats to the fighter jets in questions – and their reputation.

Ultimately, the decision to provide F-16s is a gamble, perhaps the last one that could bring about a watershed moment, if the plans by the NATO come to fruition exactly as envisioned. The NATO has to balance the potential gains against the risk of escalation to a point of no-return.

Russia has repeatedly warned against supplying offensive weapons to Ukraine, threatening severe consequences. Engaging in a high-stakes aerial cat-and-mouse game with the S-400 adds another layer of tension to an already volatile situation.

When the idea of deployment of F-16s was first discussed in the corridors of power of the NATO, President Putin famously said that Russia would find a way around to counter them, without specifying what it is. He is also on record saying that Patriot air defense system, which has already been deployed in Ukraine by the US, was ‘too old’ to be taken seriously by Russia.

The defiant roar of F-16s over Ukraine amidst the S-400’s watchful gaze, reminds everyone of the complex chessboard on which this conflict unfolds. The outcome of this aerial dance remains uncertain, but one thing is clear: the skies above Ukraine are about to become a theater of high-stakes drama, with the fate of nations hanging in the balance.

As far as the year 2024 is concerned, there is not a single sign that implies the growing chasm between the US and Russia showing any reversal.

With the screw of sanctions being tightened on regular basis, Russia could further weaponize the oil and gas supply by cutting down on the output with the blessings of the OPEC+ of which it is a major player – in retaliation.

In this context, President Putin’s impromptu visit to the Middle East recently to the discuss the equation of oil supply and price, among few other things that have not been disclosed, may be a harbingers of bad news to come, as far as the energy markets are concerned.

The rate of attacks on commercial ships in the Red Sea by the Houthi rebels in Yemen is increasing in proportion to the Israel firepower directed at Hamas in the Gaza Strip – to a crisis level.

Judging by the warships that congregate in the region and the critical discussions that take place in the corridors of power in the West and their regional allies, the situation has clearly evolved into a military conflict on a second front, as far as the war in the Gaza Strip is concerned.

The recent spate of Houthi attacks that started on Israeli-linked ships at first, has since been extended on other commercial ships as well in the Red Sea; the development has sent shockwaves through the global shipping industry and raised concerns about a potential spike in oil prices.

This strategic waterway, responsible for roughly 10% of the world’s seaborne oil trade and 12% of global trade overall, has become a precarious route due to the escalating conflict by the Houthi rebels in Yemen.

The shipping disruption is serious: Major shipping lines like Maersk and Hapag-Lloyd have rerouted vessels around the Cape of Good Hope, adding thousands of miles and days to journey times. A detour of this kind translates to increased fuel costs, delays in deliveries, and higher shipping fees for consumers, when companies feel being squeezed on their margins at a challenging time for the global economy as a whole.

Costly detour bypassing the Red Sea

It is not a silver bullet, though. The effect of weather patterns and seasonal oceanic currents, meanwhile, can further hamper the movement of the ships along the alternative route. 

A ship that sails from Europe to Sri Lanka, for instance,  that usually takes 18-25 days, depending on the size and the speed of the ship, could potentially take up to 35 to 45 days, if it bypasses the Suez Canal, choosing a detour due to the prevailing risks.

In certain situations, however, the choice of the alternative route has added benefits: the tolls across the Suez Canal can be very high and the relatively-narrow waterway is not for every single ship. The congestion and inevitable delays that arise from it, are known major issues as well.

Ports along the alternative route around Africa, on the other hand,  are experiencing increased traffic, leading to congestion and potential delays in cargo handling, as the countries in region are not usually prepared to handle an emergency of this nature. 

The delays – and of course, increasing costs –  further disrupts supply chains and adds to the financial burden on shippers that will ultimately pass it on to beleaguered consumers across the globe.

Shipping companies, meanwhile, are dreading a spike in premium on risk on the insurance front. If the crisis continues without a solution in the offing, the increased insurance costs will factor into crude oil and LNG, liquified natural gas prices soon.

With just five days to go before the Christmas, detours by some supply ships may result in delays before reaching the intended ports. China, a leading supplier of global products, perhaps sensing the calamity two months ago, had already deployed its warships in the region to safeguard its commercial interests. 

In order to counter the threats, the US has already deployed a few of its aircraft carriers and destroyers in the region; they have been active in shooting down drones and missiles launched by the Houthis since October.  Britain already had deployed its own warships in the region too. 

The US, meanwhile, has been instrumental in forming an international task force, Operation Prosperity Guardian,  to deter the attacks by the Houthis on commercial ships and ensure safe passage for the ships. 

The coalition include the US, Britain, France, Spain, Bahrain, Canada, Italy, the Netherlands, Norway and Seychelles. Some countries have already placed their military assets in the region and the palpable urgency have placed them under one umbrella for a collective response, in the event of the Houthis escalating the threats. 

The participation of the UAE and Saudi Arabia, the two significant military powers in the Middle East, however, is far from clear yet; both had been under constant attacks by the Houthis up until a year ago –  until a fragile peace process was agreed upon. Perhaps both countries do not want to derail the peace process with the Houthis that had been dragging for years along the Sunni-Shia divide.

The key players in the Middle East may be weary of the evolving stance of the US over the Houthis: the Biden Administration removed it from the designated terrorist list as one of its major policies at the outset, after taking over the White House; then the US removed its Patriotic missile batteries from Saudi Arabia – its only defense against the threat of explosive-laden drones from the Houthis for inexplicable reasons, forcing the old ally to borrow them from Greece; As the war in the Gaza Strip broke out, the Houthis threatened both Israel and its ally, the US, that resulted in the former being designated as a terrorist group – again.

A few days ago, when British Petroleum, BP, declared that they would divert its ships along a longer route while bypassing the Red Sea citing the drone threats, the British government was compelled to act. Not only did it deploy HMS Diamond, a Type 45 destroyer of the Royal Navy, to the region, but also shot down a Houthi aerial asset, most probably a drone aimed at a ship. 

Firing an expensive missiles that costs around $2 million a piece to take down a drone that just costs around a few thousand dollars, however, leads to the concerns about the  inevitable economic viability of such operations; judging by the officials concerns expressed in private,  they clearly hints this aspect of the Operation Prosperity Guardian, despite the encouragingly-soothing connotations of the code name chosen for the task. 

The tension in the Gulf of Aden in particular and in the Middle East in general, is taking its toll on the price of commodities. The price of crude oil and LNG, liquified natural gas, which had been in decline for weeks, have shot up again, that in turn may affect the inflation once again, just as it shows signs of easing. 

Oil and gas prices

In the UK for instance, the fall in inflation, clearly attributed to the falling oil prices, may go into reverse mode once again, if the latter rise.   

In this context, the efforts to finding a diplomatic solution to the Gaza conflict are clearly underway. Israel’s willingness to agree to a second pause in fighting may be a first step in this direction, although the Jewish state and Hamas are still at loggerheads over a range of major issues.

All the parties involved, directly or not, meanwhile, know the need of bringing back normalcy to the global trade and flow of oil across the vital artery for both. 

In this context, the stakes cannot be higher for the West, Iran and its proxies in the region, unless they find common ground to easing the tension.