Israel, Iran: Retaliation vs escalation

Also: Saudi Arabia, Libya, Venezuela, Brazil, and Argentina.

For an eye an eye #3, Mauricio Lasansky, 1947, print, private collection, Calgary.

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ISRAEL. IRAN. Retaliation vs escalation

How to fight without wanting to.

Around 300 drones and missiles attacked Israel late Saturday from inside Iran, Yemen and Lebanon. Israel claimed 99% of the strikes were intercepted but the act was a "declaration of war". The US said it would not join any retaliatory action.

INTELLIGENCE. Sending drones before missiles, and leaking its plans, Iran gave Israel and its allies not just hours of warning but days to prepare. This indicates a wish not to escalate and appears, for now, the narrative most have accepted. Yet by conducting history’s largest drone strike, and hitting sensitive targets like a signals facility and an F-35 base, Iran has also shown domestically it has fittingly responded to Israel’s strike on its embassy in Damascus.

FOR BUSINESS. Iran has also shown it not only has the sophistication to retaliate without escalation but the ability to breach the Iron Dome. Beyond retaliation and de-escalation, the strikes thus have a third element: deterrence. Despite limited access to foreign equipment, Iran has shown the world how leapfrog technology, like drones, can be deployed on the cheap, enlivening the question of how other tools, like AI, could also be used by it and similar actors.

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ISRAEL. SAUDI ARABIA. Riyadh rides in

Mixed messages in missile interception.

Iran's foreign minister called his Saudi counterpart Sunday following reports Riyadh intercepted Iranian drones, state media reported. An unnamed royal said Iran had "engineered" the war in Gaza to prevent Saudi normalisation with Israel.

INTELLIGENCE. Regional states, even those unfriendly to Israel, came under intense US pressure to limit Iran’s actions on Saturday. Even Lebanon reportedly let Western militaries use its airspace. Saudi Arabia has not admitted involvement, but it would have been logical to intervene. Even if Riyadh doesn’t support the war in Gaza, it has an interest in not having projectiles cross its borders. Jordan, meanwhile, said it shot down several “flying objects”.

FOR BUSINESS. The participation of Arab states in Israel’s defence can be seen as a rebuke to Iran but few stares would tolerate their territory being used as a drone or missile corridor (and it is notable so many aerial threats got as far as they did). And while Saudi Arabia may have a long-term economic interest in normalising ties with Israel, there are plenty of obstacles ahead. Opinion on the Arab street remains decidedly pro-Palestinian, which is only increasing.

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LIBYA. Fuel and gunfire

Tripoli remains on tenterhooks.

Fighting broke out across Tripoli Thursday as rival militias clashed during Eid celebrations. A US judge dismissed a lawsuit against Khalifa Haftar, a US citizen who controls Libya's east. Libya became Africa's top oil producer in March.

INTELLIGENCE. Libya’s various factions, including those who prop up Haftar’s Libyan National Army in Tobruk, have sought a path to cooperation in recent months, but the lure of oil riches, corruption and indiscipline are a consistent threat to stability. The fighting in Tripoli was attributed to individuals letting off steam – their commanders quickly deescalated and nobody died – but that this occurs on a regular basis shows how far Libya needs to go.

FOR BUSINESS. Libya's coffers are overflowing. Turkish Airlines has just returned. Gulf projects are bringing a level of Gaddafi-era glitz to a war-ravaged economy. Yet it could all unravel. Tunisia recently closed its border. The prime minister's residence was hit by RPGs. Rumours of a planned Russian naval base continue to spook diplomats. And with the US set to exit neighbouring Niger there’ll be fewer eyes on the growing Islamist militancy to Libya’s south.

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VENEZUELA. All Caracas, no stick

The lifting of sanctions has only harmed democracy.

Caracas said Friday it held secret talks with US officials on 9 April and that Washington was in breach of a commitment to comply with sanctions relief. The White House said it was concerned about Venezuela's democratic backsliding.

INTELLIGENCE. Secret talks with Venezuela are not new – Boris Johnson visited Caracas in February on behalf of a hedge fund – but they are potentially embarrassing as Nicolas Maduro continues to crack down on the opposition and rattle sabres at Guyana. In normal times, sanctions would simply be reimposed, but with oil prices high, irregular migration uncontrolled, and Russia and China sniffing around, Caracas has almost as much leverage as Washington.

FOR BUSINESS. Washington has until 18 April to decide whether to reimpose sanctions on Venezuela's oil sector. On the evidence, the sanctions will need to be reimposed. On the context, doing so would risk domestic blowback with US election-year inflation already stubborn. A fudge may be found, giving more time for Maduro to pretend at progress (two corrupt oil executives were arrested Sunday) and more time for the US to manage tensions elsewhere.

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BRAZIL. ARGENTINA. The Musk slips

Tesla’s owner stirs the South American culture wars.

Javier Milei met Elon Musk Friday, with Milei's office saying the Argentine president offered to help Musk in a dispute with Brazil. Musk this month accused a judge of being "dictator of Brazil" after he ordered several X accounts closed.

INTELLIGENCE. Whether to drive internet traffic or as a display of impulsiveness, Musk has escalated a dispute with supreme court justice Alexandre de Moraes onto his personal X account, which may contribute to the social media company’s exit from Brazil, its sixth-largest market. In doing so, Musk has further aligned with right wing ex-president Jair Bolsonaro, who has been accused by the same jurist of spreading disinformation and plotting a 2023 coup.

FOR BUSINESS. Musk may judge going after de Moraes, an increasing if improbable bogeyman of the US far-right, is good for X. And closer ties with Argentina, whose libertarian president shares the same milieu, may help with lithium for Tesla. But while Teslas are not sold in Brazil (or likely to be competitive), the antics have hurt other parts of Musk’s empire. Brazil has paused a contract with Starlink for internet to remote schools. Musk says he will provide it for free.