Biden-era Secretary of State Antony Blinken expressed concerns over the consequences of a prolonged U.S.-Iran war and said that two factors that would determine its direction are markets and munitions.
The former State Secretary noted that President Donald Trump pays a lot of attention to stock markets, bonds, and oil prices. Hence, if the markets tank and the crude oil prices keep rising, it could become a “limiting factor,” he said on the Big Take Podcast on Bloomberg on Wednesday.
At the same time, Blinken flagged that munitions are not “infinite” and production takes time. He also noted that Iran is striking the other Middle Eastern countries so hard that the U.S. “can’t sustain the effort.”
“Using very expensive interceptors to shoot down $20,000 Iranian drones is not a good equation if it continues over time,” warned the former State Secretary. He also added that if the U.S. depletes all its ammunition, which takes years to rebuild, it would leave the nation at a “disadvantage” against Russia and China.
According to Blinken, one possible “off-ramp” for the U.S-Iran war for Trump would be to declare victory, stating that Iran’s Supreme Leader Ayatollah Ali Khamenei is dead and Iran’s nuclear and missile programs are now “degraded.”
Middle East Conflict Intensifies
As the Middle East conflict hits day six, events continue to unfold. A New York Times report on Wednesday indicated that the Iranian leadership has initiated contact with Trump to explore potential ceasefire negotiations. However, a few days back, Trump wrote on Truth Social that it is “too late” for talks.
Previously, Trump stated that the war could go on for about four-five weeks or until the strike objectives are achieved. He announced maritime and political insurance for vessels passing the closed Strait of Hormuz to ensure oil flows and tame further crude oil price rise.
On Wednesday, Treasury Secretary Scott Bessent told CNBC that, along with Energy Secretary Chris Wright, he would announce a series of policies to keep energy prices in check.
When last checked, the WTI Crude futures were trading 2.77% higher at $76.73 per barrel.
Meanwhile, Edward Yardeni, President of Yardeni Research, predicted a “short war scenario”, expecting the conflict to wind up in a few weeks. He foresees a positive outcome to the war with a new regime, new policies, and a Middle East with lower geopolitical risks. Yardeni also considered this to be a time when investors could scout for hidden opportunities in the equity market.
Image via Shutterstock
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