Key Takeaways:
Iran has assessed strikes on US bases in Europe and undersea cables in the Strait of Hormuz if Washington escalates the war, the FT reported.
Iran has weighed strikes on US bases in Europe and undersea cables in the Strait of Hormuz if Washington escalates the war, pushing Brent crude above $91 a barrel.
"The threat posed by Iranian missiles to targets in Europe is real but limited," Sidharth Kaushal, a researcher at the Royal United Services Institute, said.
Two people close to Iran's leadership told the Financial Times that Iranian forces have examined potential strikes against US military assets in southeastern Europe, including Bulgaria, which last month approved the use of its Bezmer air base by US aerial refueling aircraft. Cyprus was also identified as a potential target for retaliation, one source said. Brent futures rose about 0.8 percent to $91.73 a barrel on Wednesday, while New York oil gained about 0.8 percent to $85.70. In Hong Kong, PetroChina advanced 1.78 percent, CNOOC gained 0.49 percent and Sinopec climbed 0.81 percent, bucking a weaker broader market.
The Strait of Hormuz handles about 21 percent of global oil trade, so any disruption to shipping or undersea fiber-optic cables there would carry a supply-side shock across energy and financial markets. An attack on American assets in Europe would mark a significant expansion of the conflict, drawing Washington's allies more directly into the confrontation. Trump said Tuesday that no talks or scheduled contacts with Tehran were underway.
Iranian military commanders have repeatedly warned that the country would respond to any new US attack with measures extending beyond the immediate battlefield. The threats reflect a defiant mood in Tehran, where many regime figures increasingly view a resumption of the war as a question of when, not if, according to the Financial Times. Last week, Supreme Leader Ayatollah Mojtaba Khamenei placed hardline figures in top posts within the country's security and military structures, including Mohsen Rezaei, a former Revolutionary Guards commander, in the top security post. Iranian analysts read the move as sidelining Mohammad Bagher Ghalibaf, Tehran's chief negotiator, as prospects for a lasting agreement fade.
Iran has demonstrated an interest in striking targets far beyond its immediate neighborhood. After the war began in February, Washington accused Tehran of launching missiles toward the Diego Garcia military base in the Indian Ocean, roughly 4,000 kilometers away; none reached the target. In March, Turkey said NATO air defenses intercepted several ballistic missiles launched from Iran, and the British base at Akrotiri in Cyprus was hit by a drone. The sources described Iran's attack last month on a US base in Jordan, in which three American service members were killed, as the most precise long-range strike carried out by Tehran to date.
Kaushal said Iran could use medium-range ballistic missiles, such as those in the Shahab series, against US installations in southern and southeastern Europe, though their effectiveness and accuracy decline as distance increases. Analysts cited in the report said Tehran could instead rely on regional allies and armed groups to carry out attacks rather than launch direct strikes on European territory. Iranian officials have also been warned that Tehran may be overestimating its ability to conduct highly accurate long-range strikes.
The scale of any Iranian retaliation would depend on Washington's next moves, according to the sources. One source said the regime is preparing a plan to widen the conflict if Trump follows through on threats to strike Iranian infrastructure. Trump said last month that Washington would destroy an Iranian bridge or power plant each time Tehran hits a ship in the Strait of Hormuz. A second source said Tehran would place no limit on its response, warning that if the US went too far, Iran would defend itself at any price and strike Europe as well.
The last time Iran threatened to expand a confrontation beyond the Middle East, in the weeks after the February war began, Brent spiked as traders priced in a closure of the strait before retreating once the missiles fell short. The current premium reflects a market that has learned to price the tail risk of a wider war, even as diplomats fail to reopen the strait. Talks to reopen the waterway have stalled, and Trump said Tuesday there were no talks or scheduled contacts with Tehran.
This article is for informational purposes only and does not constitute investment advice.
