The recent Israeli attack against Yemen reinforces my view of the Israeli/Iran balance of terror. For those who have not been following the story, the Houthis managed to fly a drone that got through Israeli’s air defenses and hit Tel Aviv. In response, Israel blew up a bunch of oil storage and dock cranes in Houthi’s only port that they control. The result was very striking images of burning fuel that continued for quite some time. I have seen it alleged that Israel chose to target the fuel depots just because they knew that that they would produce very striking visuals for all population living under Houthi rule to see.

Now Israel tried to dress this attack up as attacking military targets on the grounds that the port was being used to import Iranian weapons. But what they were fundamentally trying to do is put the only port that the Houthis control out of action. As all the bleeding heart aid groups were quick to point out, this threatened all the food aid that was coming into Houthi controlled territory and “continued the pattern of Israel using starvation as weapon.” I don’t know how much Israel is really trying to use starvation as weapon and how much they are truly trying to make it difficult for the Houthis to import the things needed to keep themselves armed like the Israelis claimed. But in a practical sense, there is no difference because when you truly start targeting the crucial infrastructure you threatening a society’s ability to function in both a military and a civilian sense.

What I am driving at is that this situation demonstrates the point I was trying to make in “A Strategic Overview of The Conflict Between Iran and Israel.” The fact that America had a carrier group sitting off the coast of Yemen bombing “military targets” for long time now without accomplishing anything helps make the point of why Israel would not target pure “military” targets. When Israel was the victim of successful attack on the heart of their economy (which is based around Tel Aviv in terms of where the GDP is generated), they immediately struck what is an essential economic target in Yemen. They did not waste their limited ability to get planes down into the area to strike at “military targets” because as the Americans have shown that does not work.

What is more striking is how dramatic this attack was compared to other recent counter strikes by Israel. Iran fired a ton of missiles at Israel and got a much more subdued counterstrike then the Houthis got for landing one successful drone attack. But as I pointed out in my Strategic Overview, Iran only aimed their serious weapons (as far as we can tell) at military targets. So in response they got a much milder counterstrike. The same can be said for the on going tit for tat with Hezbollah. Israel has been killing Hezbollah targets left and right but no dramatic attacks like the one the Houthis got. And I think that this is because Hezbollah has been careful not to strike at areas of core importance to the Israeli economy. What the attack on the Houthis illustrated is what Israel really feels sensitive about and how they respond to what they regard as true threats.

Much has been made about how the fact that the attack on the Houthis shows that Israel can strike Iran because the distance is similar. In one sense this ignores the fact that that striking Iran requires flying over other nations while the attack on Yemen did not and the fact that Houthis have no air defense to speak of. But in other sense, this does demonstrate that Israel recognizes the futility of attacking “military targets” in Iran. If Israel does not feel able to hunt “military targets” in Yemen where they don’t have to worry any kind of serious air defenses, why would they go through the effort of trying to hit those targets in a much better defended Iran?

This is hardly a novel idea on my part. The implications for Iran’s oil export infrastructure are mentioned in the below video which also recaps the entire story in a rather dry way.

In once sense this discussion is nothing but an interesting intellectual exercise. But in another sense, it should tell you that as the risk of an Iran/Israel conflict heats up, the risk of a sharp rise in oil prices also climbs dramatically. Oil prices are set at the margin and that means even small changes in supply can produce outsize swings in prices until weaker parties are priced out of the market. Iran is the fourth largest oil exporter in the world. If they are taken out of the market in a sudden fashion, the swings in oil prices will be extreme.