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The rumors and denial of rumors continue to swirl around Iran. Endless leaks of decisions made by the United States and/or Israel to strike at Iran’s nuclear facilities continue. In the latest variants, Americans warned that Israel might already have decided to attack Iran, with the date set sometime between the U.S. election and Inauguration Day. Or it might be the Americans attacking. It is not clear what effect this is having on Iran, but it is certainly making others players nervous, not the least of which are the oil markets.
There is an important interaction going on between two geopolitical elements. One is the attempt by Israel and the United States to force the Iranians to capitulate on the nuclear issue by convincing them that an attack is inevitable if they don’t. The other is the impact of oil prices on the global economy and thereby on international power relations. An attack on Iranian nuclear facilities would obviously spike oil prices. The real question would be whether that spike in prices would last and how high it would go. The answer to that question rests in what the Iranians would do in response. The Iranians have now been duly warned that an attack is coming. One would think that they have considered their response.
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