Israel-Iran escalation: fallout for Ukraine, Europe

The author of the Resurgam Telegram channel discussed the issue.

The main impact of the attack is on oil prices. Just the potential mention of the May 12 strike caused oil prices to jump 5%. After the actual attack, they rose another 7%. This means one thing: higher global oil prices give Moscow more resources to continue the war in Ukraine.

However, to avoid misunderstandings, it’s important to note some specifics about using such data:

1. Oil price rises are political, caused by conflict fears, and will fall back once those fears ease.
2. Russia’s economic crisis isn’t solely tied to oil prices; they only affect the pace of the crisis, which started earlier at $75-80 per barrel.

The second point is the conflict risks distracting attention from the important G7 summit on June 13-15, where key sanctions issues will be discussed. Convincing Trump to support the 18th European sanctions package, already difficult, may be further complicated by the Middle East events’ novelty.

However, the summit agenda is prepared in advance, which should act as a safeguard. Thus, even the new conflict’s impact must be balanced against the already approved schedule.

The third risk is aid meant for Ukraine being redirected to Israel. Some weapons for destroying Shahed drones were sent to the Middle East. If the Israel-Iran conflict lasts, this may become a long-term problem as Israel’s arms stocks are running low.

The key question is whether the conflict will last long, depending mainly on Iran’s reaction. Iran, already in crisis, cannot ignore attacks on strategic sites or risk internal elite moves against Khamenei. A response is certain, but the scale is unknown.

Iran’s leadership has previously said a prolonged war with Israel is not in their interest, especially given recent economic struggles and weakened proxy groups. This likely remains true despite current tensions.

If Iran truly seeks to avoid escalation, we will see proxy groups blocking attacks on U.S. targets, the Oman talks proceeding as planned, and restraint in striking Israeli civilian infrastructure to prevent a harsh Israeli response. If this happens, the “crisis” will mirror the Pakistan-India flare-up.

• On the night of June 13, Israel launched a large-scale operation against Iran, carrying out preemptive strikes on its nuclear and military facilities.