Key takeaways First ever direct Iranian attack with 200+ killer drones and missiles fired at Israel. 99% apparently intercepted by defence systems and fighter jets including US Jets No civilian deaths reported. G7 meeting convened whilst US confirms support for Israel.
Quick Thoughts
Oil and gas prices are likely to rise tomorrow exacerbating the geopolitical risk premium in energy markets. Also, possible upward movement for defence contractors and related equities (Lockheed, Raytheon, Northrop and so on) The attack is retaliatory for the Israeli strikes on Iran’s consulate in Damascus, despite being a small deployment of Iranian arsenal and a somewhat controlled attack, damage is very minimal to Israeli infrastructure with apparently only one military base being “damaged”. If Iran’s intentions were to inflict maximum damage, this is an embarrassing attack as millions of dollars of military hardware quite simply has gone to waste. But at the same time this could simply be a show of aggression to highlight to the Western world that Iran will not bend to Israeli aggression towards it. Wider region Jordanian, US and UK planes also shot down Iranian drone over Syria, Iraq and Jordan however Qatar and Kuwait have denied the US usage of their airspace whilst Egypt and Saudi Arabia expressed “concerns” over the attacks. It seems that Middle Eastern perspectives are split, Qatar and Egypt also continue their “mediatory” roles between Hamas and Israel Meanwhile the US both urged restraint and affirmed support for Israel despite Israel’s recent insubordination to US “demands”. It will be interesting to see whether the US is able to keep its leash on Netanyahu’s ambition for the region. If a wider war were to ensue, it is unlikely Iran will receive support from state actors in the region but support from its own state-sponsored groups including the Houthis and Hezbollah as well as armed groups in Syria and Iraq is likely to continue. It seems that the attention of the West is now focused upon Iran rather than Hamas.