Military and economic risks rise along with oil prices as Iran war expands

Ever since the collapse of the accord between the US and Iran, both sides have increased the scope and intensity of their attacks, and it seems no end is in sight. Iran has struck US military targets in neighboring countries. Four US service members have been killed in the past week, bringing the total killed since February 27 to 18. Iran’s Health Ministry says at least 53 people have been killed by US military action since June 27, when smaller scale attacks resumed about 10 days after the signing of the Memorandum of Understanding.

Trump has threatened to hit Iran’s civilian infrastructure, including bridges and power plants. He has also recently threatened to invade Kharg Island, a key Iranian oil shipping hub, and to hit Pickaxe Mountain where a nuclear facility is believed to be located. If he carries out any of these threats, Iran will likely respond by hitting more US military bases in the region as well as key oil infrastructure in neighboring countries.

Oil has once again climbed over $100 a barrel. This is in part due to the fact that oil shipments through the Strait of Hormuz have all but come to a halt, with both Iran and the US blocking ships. To make matters worse, the Houthis in Yemen have declared a blockade on Saudi ships passing through the Bab al Mandeb Strait, the narrow entry to the Red Sea which the Houthis control. The Houthis resumed their blockade after the Saudis hit a civilian airport in the Houthi-controlled part of Yemen two weeks ago. The Saudis reportedly carried out this strike with Trump’s blessing.