🟠 News Club - A war between Israel and Iran?

With explosions echoing through Tehran and Tel Aviv, oil prices spiking, and the world holding its breath, there was no way this wasn’t going to be the topic for the Monday News Club newsletter…

A war between Israel and Iran?

What started as another chapter in decades of shadow warfare has burst into the open. On Friday, Israel launched Operation Rising Lion - striking deep into Iran's nuclear facilities and taking out its top military commanders. And Iran has hit back hard, launching what they're calling a "crushing response”.

So, where does this leave us? Our Club Picks this week dig into the fascinating mechanics of how this all unfolded and what comes next.

1. Israel launched their unprecedented attack by secretly pre-positioning their attack drones inside Iran. They were decoys for over 200 Israeli fighter aircraft making their precision strikes. This Center for Strategic and International Studies piece that goes into these new ways of war is some great background.
   

2. According to some defence analysts, Iran could launch "between 600 to 5,000" drone strikes in the next 90 days, though Israel's sophisticated air defences make success questionable. The bigger question is whether Iran widens the conflict or tries to keep it contained. You read up on that here.
   

3. How bad can it get for the world at large? The BBC takes you through it. For one thing, if Iran decides to disrupt oil flows, we could see prices spike, and that would mean inflation coming roaring back. There is also the prospect of Iran’s ruling regime falling, with rumours that its ruling class is fleeing the country.
   

4. What does it mean for the Australian economy? The ABC has run the numbers, and oil prices have already jumped by over 8%. If this escalates further, we could see the Reserve Bank having to weigh higher inflation against economic uncertainty - and that’s not a comfortable position.

This feels very different from the usual tit-for-tat... Both sides have crossed red lines that had previously been held, even in the nations’ worst moments. My hot tip is we’ll be talking about this again real soon…