Mikkel Rosenvold
6 weeks ago

Analyst: A very soft response from Iran

Iran's limited missile and drone strike against Israel over the weekend following an Israeli attack in Damascus prompts strategic restraint and cautious market responses.

Iran executed a controlled retaliatory strike against Israel, launching several hundred missiles and drones, primarily from Iranian territory. The attack, which targeted Israel, saw the majority of these projectiles intercepted by Israel and Western defenses over Jordan and Syria, resulting in minimal damage. Analysts perceive this as a measured response, avoiding the use of heavier military assets like Iran's air force or ballistic missiles, and not targeting Western interests directly, writes geopolitical analyst Mikkel Rosenvold of Steno Research.

The U.S. interpretation of the strike suggests a recognition of this act as closing the current cycle of aggression, advising against further offensive moves by Israel. This response indicates that the U.S. is keen on stabilizing the situation without escalating to a broader conflict.

Markets reacted negatively with a drop in Bitcoin prices, anticipating potential fallout when markets open on Monday. However, the general consensus among observers is that market impacts will be transient. The situation is not expected to escalate into a major war or global conflict. Future conflicts might be more localized, possibly involving Iranian proxies like Hezbollah, but without direct U.S. support for Israeli actions.

Investors are advised to view any significant market dips as buying opportunities, anticipating a market correction. The primary risk remains potential disruptions in the Persian Gulf, which could affect global oil and gas supplies, should Iran choose to escalate by targeting maritime routes. However, this scenario is currently deemed unlikely.

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