Intelligence Brief: Oil Infrastructure Should Weather Escalation in Middle East

It is very likely that conflict in the Middle East will escalate in the coming weeks/months. Although impossible to foresee, military engagement is likely to be focused in Southern Lebanon and Northern Israel.

Notably, the U.S. is moving military forces to the region, revealing U.S. concern that direct conflict between Israel and Iran is possible. All parties probably want to avoid damage to oil Infrastructure, but a longer and more wide-ranging escalation cannot be entirely ruled out.

Yet again the world is concerned about escalation of the current Middle East war between Israel on the one hand and Hamas, Iran, Hezbollah, and militia organizations supported by Iran on the other. This concern was brought on this time by two Israel actions. The first was the killing of a senior Hezbollah military commander in Beirut, which was a response to the killing of a dozen children on a soccer field in northern Israel, an attack that Hezbollah denied initiating. The second was Israel’s killing of senior Hamas political official, Ismail Haniyeh, in Tehran. In response to these two attacks, both Hezbollah and the Iranian government has publicly promised retaliation. Small attacks by Iranian-backed militias in Iraq and Syria against U.S. forces based in these two countries have also restarted after a long hiatus. The conflict has taken many twists and turns since it began with Hamas’ terrorist attack on October 7, and predicting the exact path a war will take is impossible. That said, given the actors involved, what has occurred so far, and what the military capabilities of the combatants are, some likely parameters of an escalated war can be posited.

First, it is likely that both Iran and Hezbollah will follow through on their threats in the near-to-medium term. Israel will then retaliate against both, depending on the size, scope, and effectiveness of the attacks. Israel’s counterattacks will occur while it continues to prosecute its war against Hamas with focus on Hamas’ political-military leadership. Much of Iran and Hezbollah’s attacks will be aerial, using artillery, drones, cruise, and ballistic missiles. Given the Israeli and coalition success in defending against the April 13 drone and missile barrage from Iran and its proxies, look for Hezbollah and Iran to change tactics to increase the chances of damage. While the April 13 attack was telegraphed, which allowed defenses to be moved into place, this attack is less likely to be as predictable, and it will be more diverse in its targeting and last longer – pushing the limits of Israel and its partners’ defensive capabilities. The United States has moved significant forces into the region to bolster the defense of its own troops and of Israel. U.S. forces in the region can also conduct offensive operations against Iran and/or its proxies.

Second, any ground war in the region beyond current operations in the Gaza Strip will occur in northern Israel and/or southern Lebanon. Hezbollah may try to use ground forces in small units to infiltrate into Northern Israel, but they will not conduct a large-scale ground invasion. In contrast Israel may send ground forces into Lebanon to both find and destroy Hezbollah forces and arms caches as well as to establish a larger buffer zone between remaining Hezbollah forces and northern Israel. This would lead to more refugee flows and further destabilize an already very rickety Lebanon. Third, while Iranian and Hezbollah aerial attacks will be aimed at both military and civilian targets, Israeli offensive responses (and U.S. offensive attacks) will be aimed at military targets. Iran’s oil infrastructure will not be targeted in any campaign unless the newly escalated war continues for months. There will be sufficient military targets, including Israeli targeting of Iranian military and political leadership, that attacks on infrastructure will not be considered. Iran will also not likely strike at Gulf Arab oil infrastructure or export capabilities unless the war is lengthy and the Iranian leadership believes that it is losing the exchange. At that point, Iran may strike at Gulf Arab oil infrastructure to help build political pressure for Israel to cease attacks on Iran.
Source: ESAI Energy