Ultra-hardline Iranian daily urges Hormuz closure over airline sanctions

Israeli Prime Minister Benjamin Netanyahu has decided on the response to this month’s aerial bombardment from Iran, according to Israel’s Kan 11 News on Tuesday, and the strategy will now be referred to Israel’s cabinet.

Netanyahu's government is made up of a right-wing coalition mostly calling for a tough response to the 181 ballistic missiles launched towards Israel.

It comes as the United States has sent 100 troops and deployed the Terminal High-Altitude Area Defense (Thaad) antimissile battery, ahead of an expected retaliatory strike from Israel on Iran that may provoke yet another attack from Iran.

Prime Minister Benjamin Netanyahu assured US President Joe Biden in a phone call last week that Israel will refrain from attacking Iran's nuclear or energy facilities, US newspapers reported citing officials.

It is not the first time that the Israeli premier is said to have made a plan of action, but as the psychological war between the two sides continues, timing may be key.

Israel is currently in the middle of a month of religious holidays, and after last year’s October 7 attack caught troops off guard amid the final one of the month, many believe that the government is giving the country time to breathe.

Last year's October 7 attack happened in the middle of the Simchat Torah festival, and Israel may be reluctant to invite an escalation to the war one year later.

Also crucial is the US presidential election, which is less than three weeks away.

“The US will want to get this done soon so it’s faded out of the news story before the election. Generally speaking incumbents don’t like wars around elections," said Michael Knights, an Iran expert at the Washington Institute for Near East Policy.

"It’s a distraction and looks like things aren’t under control. So once the holidays are over Israel and the US will want to get this over in a matter of weeks so the US can draw a line under it,” he added.

On Monday, a massive bombardment from Hezbollah saw swathes of central Israel sent to shelters as sirens sounded across most of the region.

Israeli intelligence and defense analyst, Ronen Solomon, predicts Israel will in fact carry out a multi-dimensional attack which may already have begun.

“Maybe one of the responses was the explosion we saw this week at the iron market in Tehran,” he explained, referring to a mysterious fire that broke out in a market housing companies manufacturing parts for Iran’s nuclear development.

“Those facilities supporting the nuclear project could well have been part of this multi-dimensional attack,” he added. “It means that Isfahan can also be a target, with Ministry of Defense facilities for developing a nuclear bomb. It could be hit without being considered a nuclear facility like Natanz.

Other options are the UAV manufacturing facilities in Isfahan, Solomon said, and the missile launching sites in Tabriz which gives Iran a unique position to attack Israel from north to south.

Psychological warfare

An Israeli official, speaking on condition of anonymity, told Iran International that the delay could as easily be a part of the psychological war as the ongoing discussions with the US. Biden has said sending the THAAD system to Israel is to defend Israel, but said he will not support a direct hit on Iran’s nuclear facilities.

“Israel will keep its cards close to its chest and strike when it’s ready. Bibi knows that timing is key and is the master of psychological warfare with Iran."

It took Iran over two months to avenge the killing of Hamas's political leader, Ismail Haniyeh, in an IRGC compound in Tehran, and Iran's retaliation came only after an airstrike killed Hezbollah leader Hassan Nasrallah in Beirut.

A year's worth of bombardments on Israel from rockets, missiles and drones launched by Iran itself and its regional allies Hamas in Gaza and Hezbollah in Lebanon has left Israel facing a looming shortage of interceptor missiles, the FT reported.

Since the Hamas invasion now known as the Black Sabbath, over 20,000 rockets and missiles have been fired from Gaza and Lebanon alone.

So far, the Iron Dome has shot down the short-range rockets and drones from Hamas in Gaza, but it is the system known as David’s Sling which has intercepted the heavier rockets from Hezbollah’s huge arsenal in Lebanon.

In the multi-layered system, the Arrow defence has been used to block the ballistic missiles from Iran, but several of these in the recent attack struck, more than 30 of them hitting Nevatim air base alone, as shown in open source analysis.

Another missile exploded less than a kilometer from Israel’s foreign intelligence agency, Mossad.

Drone attacks

Attacks have also come from Yemen, Syria and Iraq, with low-quality drones also penetrating the country’s air defences. On Sunday, a drone from Hezbollah killed four soldiers and injured dozens more when a precise hit on a military base caught soldiers in the mess eating dinner.

Solomon, who spent 10 years as an advisor to one of the military's intelligence units and is writing a book on Iran’s nuclear program, said bolstering Israel’s defences is key as tensions between the two archenemies escalate.

“Israel is using hundreds of their interceptors by the day against Hezbollah, but the problem is not the rockets, but the missiles. What we really need the THAAD for is against Iran. We would expect double the kind of attack from before.”

However, Dana Stroul, a former senior US defence official with responsibility for the Middle East, told the FT, “Israel’s munitions issue is serious”.

She said: “If Iran responds to an Israel attack [with a massive air strike campaign], and Hezbollah joins in too, Israel air defences will be stretched,” she said, adding that US stockpiles were not limitless.

“The US can’t continue supplying Ukraine and Israel at the same pace. We are reaching a tipping point.”

Boaz Levy, chief executive of Israel Aerospace Industries, a state-owned company which makes the Arrow interceptors used to shoot down ballistic missiles, admitted in an interview with the FT that operations were running triple shifts to keep production lines running.

“Some of our lines are working 24 hours, seven days a week. Our goal is to meet all our obligations,” Levy said, adding that the time required to produce interceptor missiles was “not a matter of days”. While Israel does not disclose the size of its stockpiles, he added: “It is no secret that we need to replenish stocks.”

"Iran Air was the only airline in our country flying to Europe, and considering the new sanctions of the European Union against Iran Air, not a single Iranian airplane will fly to Europe now," said Maqsood Asadi Samani, Director of the Association of Iranian Airlines.

On Monday, the European Union introduced sanctions targeting Iran Air, Mahan Air, and Saha Airlines. The sanctions also covered various industrial and transport companies as well as related officials, businessmen and military personnel.

The United States and Western allies accuse Iran of using its civilian air fleet to transfer missiles to Russia for its war in Ukraine - charges Tehran denies.

Asadi Samani said there had been significant demand for flights from Iran to European destinations which will now likely now be met by foreign airlines.

"Flights to Europe in this situation will probably be made through connecting flights in intermediate countries, such as Turkey and the UAE," he said, adding that passengers from Iran will now have to rely on such routes to reach Europe.

Jafar Yazerloo, the spokesperson for the Iranian Civil Aviation Organization, said Iran Air proactively suspended the flights to avoid the consequences of not being allowed to land at European airports and to prevent passengers from being stranded both inside and outside of Iran.

Yazerloo also noted that efforts are underway through diplomatic channels and other relevant organizations to find alternatives for passengers affected by the sanctions.

The European sanctions against Iran’s civil aviation industry are particularly significant, as Iran Air reportedly operates an average of 24 weekly flights each way to at least nine European cities, including Paris, London, Frankfurt, and Rome, according to information obtained by Aviacionline via Cirium.

Last month, the United States sanctioned Iran Air after accusing Tehran of supplying Russia with short-range ballistic missiles. The US Treasury accused Iran Air of having transported goods "on behalf of Iran’s Islamic Revolutionary Guard Corps (IRGC) and Ministry of Defense and Armed Forces Logistics (MODAFL)."

Iran has been deeply involved in Russia’s war effort in Ukraine since mid-2022, providing drones, spare parts and training. However, the provision of missiles is viewed by Western powers as a significant escalation warranting a strong response.

“Heightened oil supply security concerns are set against a backdrop of a global market that – as we have been highlighting for some time – looks adequately supplied," the IEA said in a monthly report on Tuesday.

"For now, supply keeps flowing, and in the absence of a major disruption, the market is faced with a sizable surplus in the new year,” the Paris-based watchdog added.

An October 1 missile attack by key OPEC-member Iran on Israel sent oil prices soaring as investors fretted over a potential supply disruption from an Israeli counterattack on Iran's oil facilities.

Most of those gains have evaporated however, as buoyant global supply and lackluster demand in China sapped price momentum while no retaliation has yet materialized.

The IEA, which manages developed countries' emergency oil stocks, said government oil storage stood at over 1.2 billion barrels and spare capacity in OPEC+, which comprises the Organization of the Petroleum Exporting Countries and allies such as Russia, were at all time highs.

"As supply developments unfold, the IEA stands ready to act if necessary," the agency said.

Oil sites off the table

Prime Minister Benjamin Netanyahu assured US President Joe Biden in a phone call last week that Israel will refrain from attacking Iran's nuclear or energy facilities, US newspapers reported citing officials.

Oil prices tumbled nearly 5% toward a two-week low on Tuesday, driven by the U.S. media reports which eased fears of a supply disruption.

In response to the escalating conflict following its October attack on Israel, Tehran reportedly moved its tankers away from Kharg Island, one of its main oil export terminals in the Persian Gulf – a precautionary measure taken to shield the tankers from potential Israeli retaliatory strikes.

Iran had around 40 million barrels of floating oil storage in early October, enough to continue exports to China for one month.

While it is unclear whether Kharg Island is among Israel's potential targets, recent data obtained by Iran International shows that Iran's oil loadings have plummeted by nearly 70% in early October, indicating significant disruptions in its oil export capabilities.

As a major oil exporter and OPEC member, Iran’s oil exports make up 65% of its government budget and 8% of its GDP – though it recently fell short of realizing a quarter of its projected oil revenues.

Despite its escalatory attack on Israel in October, Tehran has since signaled an apparent desire to avoid an all-out war while also asserting its readiness for it if necessary.

The reports cheered markets, and oil prices fell nearly 5% to almost a two-week low on Tuesday as fears of a supply disruption eased.

Israel has publicly pledged to carry out a painful counterattack for an Iranian Oct. 1 attack on its soil with around 180 ballistic missiles but has yet to specify targets.

The Biden administration has in the past two weeks counseled Israel to carry out a more limited counterstrike aimed at preventing a full-scale war.

In a Wednesday phone call, Prime Minister Benjamin Netanyahu told Joe Biden that he is planning to strike military infrastructure rather than oil or nuclear facilities in Iran, two officials familiar with the matter told The Washington Post.

The account was corroborated by two officials cited by the New York Times.

One of the two officials told the Washington Post that Israel’s retaliatory action would be calibrated to avoid the perception of “political interference in the US elections".

Some US allies in the region have been lobbying Washington to prevent Israel from striking oil facilities in Iran for fear that their own oil infrastructure would be hit in a counterattack, according to reports by Reuters and the Wall Street Journal.

They have conveyed to Washington that they disapprove of Israeli or American use of their airspace for any attack on Iran or having their land used as a launchpad for any strike, the WSJ reported last week.

‘Netanyahu’s stance softened’

During the Wednesday discussion with Biden, Netanyahu was in a “more moderated place” than he had previously been, the US official told The Post, describing the call between the two leaders.

“The apparent softening of the prime minister’s stance factored into Biden’s decision to send a powerful missile defense system to Israel,” the report said citing both officials.

Pentagon announced on Sunday a US air defense battery will be stationed in Israel to bolster air defense against Iran's potential ballistic missiles, amid preparations for a possible Iranian response to a highly-anticipated Israeli retaliatory attack.

"At the direction of the President, Secretary Austin authorized the deployment of a Terminal High-Altitude Area Defense (THAAD) battery and associated crew of US military personnel to Israel to help bolster Israel's air defenses following Iran's unprecedented attacks against Israel on April 13 and again on October 1," the Pentagon's press secretary announced in a statement.

‘Diplomacy fails’

Since the October 1 missile barrage, Iran has appeared to signal its effort to avoid an all-out war with Israel.

“We are not seeking war, although we are fully prepared for it. We believe that diplomacy must work to prevent a major crisis in the region,” Iran’s Foreign Minister Abbas Araghchi said during his regional tour which took him to Lebanon, Iraq and Oman.

However, he ended his tour in Muscat with a press conference in which he said “Iran does not see a basis for [continuation of indirect] talks with the US until the current crisis is resolved.”

Some observers, including former senior lawmaker Heshmatollah Falahatpisheh and veteran journalist Mohammad Aghazadeh, believe Araghchi’s remarks at the end of his extensive diplomatic efforts signal the “failure of diplomacy”, and indicate that “there is no other choice but war.”

Similar sanctions imposed by the European Union and the United Kingdom were enacted on Monday to curb Tehran's missile development efforts.

Tuesday’s sanctions by the Albanese government target two directors and a senior official in Iran’s Aerospace Industries Organization, the director of the Shahid Bagheri Industrial Group, and the commercial director of the Shahid Hemmat Industrial Group.

The entities, which enhance Tehran’s military capabilities, have previously faced sanctions over their involvement in the country’s missile development and military activities. The Aerospace Industries Organization develops and produces military and civilian aerospace technologies, focusing on ballistic missiles. The Shahid Bagheri Industrial Group manufactures missile systems, while the Shahid Hemmat Industrial Group specializes in liquid-fueled missiles.

“Iran’s 1 October launch of over 180 ballistic missiles against Israel was a dangerous escalation that increased the risk of a wider regional war,” the Australian statement read.

Since Iran’s recent missile barrage on Israel, its second direct attack in six months, both the region and the West are on high alert for Israel's anticipated retaliation.

According to The Washington Post, Prime Minister Benyamin Netanyahu has given assurance to the Biden administration that Israel will refrain from attacking Iran’s nuclear or energy facilities.

Some US allies in the region have lobbied Washington to prevent Israel from striking oil facilities in Iran for fear that their own oil infrastructure would be hit in a counterattack, according to reports by Reuters and the Wall Street Journal. They have conveyed to Washington that they disapprove of Israeli or American use of their airspace for any attack on Iran or having their land used as a launchpad for any strike, the WSJ reported last week.

The US, meanwhile, expanded its sanctions last Friday, targeting Iran's so-called “ghost fleet” of ships and related companies operating in the United Arab Emirates, Liberia, Hong Kong, and other jurisdictions that reportedly facilitate the transport and sale of Iranian oil to buyers in Asia. Additionally, the State Department designated a network of companies based in Suriname, India, Malaysia, and Hong Kong for allegedly coordinating the sale and transport of petroleum and petroleum products from Iran.

The UK’s sanctions, announced this week, targeted senior figures in Iran’s army, air force and organizations linked to Iran’s ballistic and cruise missile development.

The EU sanctions, approved during a meeting of the bloc’s foreign ministers in Luxembourg on Monday, targeted seven individuals and seven entities involved in the transfer of military technology to Russia.

“Today’s designation includes individuals and entities responsible for the development and transfer of unmanned aerial vehicles (UAVs), missiles and related technology to Russia in support of its war of aggression against Ukraine, and to armed groups and entities undermining peace and security in the Middle East and the Red Sea region,” read a statement by the European Council.