Key Takeaways:
Israel has communicated to Washington its willingness to participate in further US military strikes against Iran and is now awaiting President Donald Trump's decision on whether to escalate, according to Israeli officials and a report from the Israel Public Broadcasting Corporation.
Israel told the US it is prepared to join a third wave of strikes against Iran, a senior Israeli source said, as Trump authorized a second consecutive day of bombing that hit roughly 90 targets across the Islamic Republic. "We've proved that we stand with the US," the source said. "We're willing to do it again, if needed."
The offer places Jerusalem at the center of a rapidly escalating conflict that has already pushed Brent crude above $100 a barrel, up nearly 40 percent since the US-Israeli campaign began on Feb. 28. The Strait of Hormuz, through which about 21 percent of the world's seaborne oil passes, remains a flashpoint after Iran attacked three commercial ships in violation of a 60-day cease-fire that collapsed this week.
Israeli Defense Minister Israel Katz told reporters Thursday that the Israel Defense Force is "prepared to strike Iran for the third time — and with greater force than before" if warranted. The IDF has placed its intelligence units on high alert, continuously updating target lists and maintaining "close operational coordination" with the US military, according to i24 News.
A Delicate Balance of Interests
For now, all major players appear to prefer keeping Israel out of the active campaign, at least in the short term. Gulf states, which share a common interest with Israel and the US in containing Iran, face a serious political challenge if the confrontation takes on an Israeli character rather than remaining an American-Iranian conflict. Israel itself has no immediate incentive to force its way into the fighting as long as the US continues to degrade Iranian military infrastructure.
Iran also appears reluctant to draw Israel into the conflict. Israeli intelligence assesses that Tehran "has no interest in drawing Israel into the conflict," the Jerusalem Post reported, citing two Israeli officials. The Iranians know that Israel is waiting for an opportunity and could escalate significantly.
Yet that equilibrium could shift within hours, officials caution. "Right now, we are monitoring the American moves. They are leading at the moment," a senior Israeli official said Wednesday. The official added that Israel is preparing for a scenario in which Iran attacks Israel directly, prompting a retaliatory strike on Iranian infrastructure aimed at undermining regime stability.
Oil Markets Price in Escalation Risk
The geopolitical risk premium embedded in crude prices has widened sharply. Brent crude has surged nearly 40 percent since the war began in late February, with the Strait of Hormuz disruption threatening global supply chains. The US has roughly 50,000 troops in the region and is deploying an additional 1,000 soldiers from the 82nd Airborne Division, along with thousands of Marines aboard Navy ships.
The last time a comparable military confrontation threatened Persian Gulf oil flows — during the 2019 attacks on Saudi Aramco's Abqaiq and Khurais facilities — Brent spiked 15 percent in a single session before retreating as Saudi Arabia restored output within weeks. The current disruption involves active hostilities between the world's largest economy and a major OPEC producer, a scenario with no close modern precedent.
Trump declared the cease-fire with Iran "over" at the NATO summit in Ankara, calling Iran's leadership "scum," "evil," and "sick people." The administration has also submitted a 15-point ceasefire plan to Iran via Pakistani intermediaries, according to a person briefed on the proposal, though Iran has denied that any negotiations are taking place.
Netanyahu has not publicly commented on the latest airstrikes but said last month that Israel will strike Iran "whenever necessary." The prime minister is expected to travel to the US, though Washington has not yet set a date, possibly to avoid the appearance that Israel is pushing for renewed war.
This article is for informational purposes only and does not constitute investment advice.
