Analysis by Energy Workforce President Tim Tarpley
President Trump has indicated that he may consider launching additional attacks on Iran to “finish them off” should negotiations fail. This comes on the heels of talks between Saudi Arabia, Turkey and Pakistan with Iran on Monday of this week in an attempt to head off additional military conflicts. The Saudi foreign ministry said the talks were meant to “de-escalate between the parties to the current crisis”. The talks are significant in that they are the first to be held since the three countries formed a defense alliance in Mecca in August.
All of this speculation is occurring as the price of Brent crude oil sat around $115 a barrel early Monday as it ran up last week due to supply concerns and a continuation of conflict in the Middle East and a lack of a clear end game in the Russian invasion of Ukraine. Winter is slowly creeping in as well, which could drive demand even higher.
In the United States, we are one week out from the midterms, and it appears unlikely that President Trump would choose to take any action before those occur. Affordability and prices are certainly the number one issue on voters’ minds, and the Iran war has been a contribution to a run-up in energy prices. Indications are that the House is more likely than not to flip to Democratic control, but the Senate is still very much up for grabs. Whatever happens next week, it appears logical that President Trump will want to act decisively to bring the Iran war to some sort of conclusion before the new Congress is sworn in and will likely come with increasing oversight of his actions.
How will this all play out? Likely we will see a return to some sort of combat operations after the elections. How significant these are will likely depend on what the status of the negotiations is between Iran and the relevant parties. Clearly, Iran has learned that the Strait of Hormuz, along with using the proxies in Yemen to attack Saudi Arabia, are perhaps their two most powerful negotiating tactics. Therefore, we can expect that the Iranians will use both levers should combat operations begin again. Both of these actions will have profound implications for worldwide energy markets, so close attention will be paid to developments going into next week. Overall, we can expect continued attention to be paid to domestic production in the United States as well as Latin America as investors look for comparatively stable places to meet growing worldwide energy demand.
Tim Tarpley, Energy Workforce President, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.
