Tuesday, February 22, 2011

Iranian Warships in Mediterranean

This just in:

Iran Warships Complete Suez Canal Voyage Amid Israel Objection

Iranian warships sailed through the Suez Canal to reach the Mediterranean Sea for the first time since 1979 as Israel stressed its objection to their voyage to Syria.

The two ships entered the canal early today after the approval of Egypt’s Defense Ministry, the state-run Middle East News Agency cited Ahmed El Manakhly, head of traffic at the Suez Canal Authority, as saying. MENA didn’t specify when the vessels reached open water.

This is already causing widespread concerns:

Crude reached its highest level in a week in New York on Feb. 18 as the heightening of tensions between Iran and Israel because of the trip increased concerns over instability in the region. Iran is the second-biggest producer, after Saudi Arabia, in the Organization of the Petroleum Exporting Countries. Oil jumped to the highest in more than two years in New York today as Libyan unrest stoked further concern over supplies.

The significance of this recent development is highlighted:

Prime Minister Benjamin Netanyahu said Feb. 20 that Israel views with “gravity” Iran’s plan to send the vessels through the canal, a move that he said highlights the need to increase his country’s defense budget. Lieberman said on Feb. 16 that Israel wouldn’t “ignore forever” such acts.

This will be worth following. As the article states:

“The Iranian warships saga is a significant one but with limited consequence,” Richard Lee, a senior equity analyst at Emirates NBD Asset Management Ltd. in Dubai, said in comments e- mailed today. “It is significant because of the appearance of an emerging tension between Iran and Israel, and it likely to stay as that. I don’t expect this to turn into a full-scale war simply because Iran cannot afford it now.”

It is hard to imagine that Iran would want any conflict at this point. However, Ahmadinejad is on trouble at home and he could be looking for a diversion. We'll have to wait and see what he has in mind this time around.

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