Today, Wednesday April 10, 2024, for Muslims around the world, is the holiday of Eid el-Fitr, that is to say the breaking of the Ramadan fast. It is one of the biggest holidays in Islam, if not THE biggest celebration in their calendar.
In the previous post I tried to measure the intensity of the Iranian response to the affront of the Israeli army for having pulverized the Iranian consulate in Syria and at the same time the senior officers of the Quds forces.
Like every trader, what interests me in particular is the intensity of the Iranian response which will determine the magnitude that the price of a barrel of oil could take in the coming days.
By observing past similar events, we can statistically refer to the expected degree of response... (see post: " Retaliate...or not retaliate... ? ")
Today on this holiday... another milestone has just been crossed by Isarël... the murder of the 3 sons of Hamas commander Ismaël Haniyed, who were celebrating the breaking of the fast with the family. An Israeli air attack targeted and destroyed the entire building where the family of Commander Haniyed, who was present with him in neighboring Qatar, was meeting.
Because let us remember, a few days ago, through Qatar and Egypt, the senior leaders of Hamas and Israelis met for truce talks in the Gaza Strip and the withdrawal of IDF troops for a duration of 6 weeks in exchange for hostages from both camps... it was a question of 40 Israeli hostages and 400 Palestinian prisoners, against a truce of 6 weeks...
Could this be one slap too many...?
There, it is very likely that Israel will push the envelope even further and that the point of no return will potentially be reached.
Iran knows full well that its army is obsolete (due to the repeated embargoes imposed on the country) and is certainly not going to go head-on.
On the other hand, Iran is very well placed to blackmail the Strait of Hormuz... a tiny strait controlled by the country and which carries a third of the world's oil traffic...
And yes... when we see the neighboring countries: Iraq, Kuwait, Bahrain, Qatar, Saudi Arabia, Arab Emirates... we understand better why!
For decades, Iran has used blackmail in the Strait of Hormuz as a means of pressure on the Western world. Moreover, in 2012, a pipeline was inaugurated by Saudi Arabia to transport its oil via land in anticipation of other potential blackmail of the strait lockdown by Iran...
Moreover, Saudi Arabia and the Arab Emirates have moved closer to the USA only to ensure their military protection against Iran in exchange for an oil deal.
Win/win... because if the Iranian army is not at the top... there are worse than them! The armies of Saudi Arabia and the Arab Emirates are at the bottom of the ranking.
Hence the establishment of these pretty little American bases in the Persian Gulf, just opposite Iran to taunt them and show them their big armed forces and their pretty combat aircraft carriers.
So today we read several things in the international press:
Blackmail in the Strait of Hormuz
That Iran has enriched enough uranium to make 3 small atomic bombs
So, yes, point no. 2 is supposed to be scary... so that traders take long positions on barrels of oil.
We also had that with Putin... the world press which likes to put juicy things on the table to get our teeth into, just to make nice films and bad trips.
Already the Iranian army is not in good shape... even with fanatics in power, they are very cold and reasoned... and above all they have an excessive EGO... they do not want to lose and know their weaknesses ...
So for point n°1: the Iranian economy is suffering a lot since the embargoes, blocking the Strait of Hormuz and alienating all their Muslim neighbors... is not very well seen.
For point n°2: Yes Iran has increased its nuclear capabilities beyond the authorized threshold but seeing American bases right in front of their noses, they are not going to flinch.
So what will it be like, their very violent response that the senior Iranian leaders are promising to the Israeli and American people?
Baaaah... send their Proxis to do the dirty work... the Houthis, Hezbollah... send rockets to Israel, which has an iron dome to neutralize them.
Attacking Israeli embassies and consulates around the world... these poor ambassadors who asked for nothing and are not armed. It's always easier to attack those who are not necessarily armed.
Attacking boats that will transit via the Red Sea... well, that's already been done since November 2023.
Temporarily block the Strait of Hormuz? But it will be touchy towards their Muslim neighbors.
I remain awaiting the response that Iran will be able to give, especially in the face of this final snub of the killing during the religious festival of Eid El Fitr...
But there, they have their backs against the wall... they are obliged to answer a minimum so as not to lose face... it's a question of Ego.
My job is to trade oil, to position myself as accurately as possible on the Crude Oil market and for this I must be able to analyze and gauge the potential risks which can cause the market to shift very quickly up or down. (And wow, if we have the ultimate surprise of a 6-week ceasefire agreement on Gaza, that risks shifting significantly downwards).
This is why I like to trade oil and exclusively oil, because the price of crude oil is closely correlated with geopolitical, climatic, health and economic tensions in the world. It's fascinating to see all this and to deploy strategies in relation to this "fear" factor very present among oil traders and for good reason, their assets can move and shift significantly intraday on a single piece of news or potential possible event. .. yes-yes... I use the word "potential"... as the saying goes: "Buy the rumor and sell the news!"
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