HOUSTON -- (Jan. 3, 2020) -- As tensions between the United States and Iran reach perilous levels, three experts in the Center for Energy Studies at Rice University's Baker Institute for Public Policy are available to speak with media about the implications for the markets and geopolitics.
The experts are Jim Krane, the Wallace S. Wilson Fellow for Energy Studies; Kenneth Medlock, the James A. Baker III and Susan G. Baker Fellow in Energy and Resource Economics and director of the Center for Energy Studies; and Mark Finley, fellow in energy and global oil.
"The Trump administration’s attacks lie far outside international norms," Krane said. "By assassinating Qassem Soleimani and other official or quasi-official Iranian and Iraqi government personnel on Thursday, the Trump administration appears to have closed off remaining avenues for a peaceful resolution of its conflict with Iran, making war much more likely. The U.S.'s willingness to conduct extrajudicial executions and the dismayed reactions of U.S. allies around the world will isolate Washington at the very time when the U.S. needs allies to confront a more dangerous Iran."
Krane, Medlock and Finley said Iranian reactions will set the tone for what happens next. Iran could leverage a restrained reaction to convince the Europeans and possibly Russia to more effectively circumvent punishing U.S. sanctions. Or, the Iranian reaction could include asymmetric attacks on U.S. interests around the Middle East and beyond, including international shipping in the Gulf and energy infrastructure in Saudi Arabia and the United Arab Emirates that operates under U.S. protection.
"Oil shipments from the Middle East are still critical to the global market; they are now at greater risk," said Finley, the author of a recent Baker Institute report on energy security. "Therefore the market is responding appropriately by pushing oil prices higher. While the U.S. is self-sufficient, higher prices would still have adverse impacts on U.S. consumers and confidence."
In the long term, Iranian hard-liners’ push for nuclear weapons will be further encouraged and legitimized, raising the prospect of a far more dangerous Iran emerging in the future and the potential for further nuclear proliferation in the Persian Gulf, Krane said.
"The strike could push Iranians to rally around their government, undercutting the effects of U.S. sanctions on Iran as well as Iranian opposition movements that the Trump administration has been trying to nurture," Krane said. "We could also see Iraq turn further away from the U.S., perhaps ejecting U.S. forces from the country."
"There is much uncertainty about how this will play out, but the concerns about conflict escalation in the region are justifiably higher," Medlock said. "Moreover, given the precedent of Abqaiq, future strikes on high-value energy targets is a real concern."
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For more information or to schedule an interview with Krane, Medlock or Finley, contact Jeff Falk, director of national media relations at Rice, at jfalk@rice.edu or 713-348-6327. The Baker Institute has a radio and television studio available.
Related materials:
Finley bio: www.bakerinstitute.org/experts/mark-finley
Krane bio: www.bakerinstitute.org/experts/jim-krane
Medlock: www.bakerinstitute.org/experts/kenneth-b-medlock-iii
Follow the Baker Institute via Twitter @BakerInstitute.
Follow the Center for Energy Studies via Twitter @CES_Baker_Inst.
Follow Rice News and Media Relations via Twitter @RiceUNews.
Founded in 1993, Rice University’s Baker Institute ranks among the top three university-affiliated think tanks in the world. As a premier nonpartisan think tank, the institute conducts research on domestic and foreign policy issues with the goal of bridging the gap between the theory and practice of public policy. The institute’s strong track record of achievement reflects the work of its endowed fellows, Rice University faculty scholars and staff, coupled with its outreach to the Rice student body through fellow-taught classes — including a public policy course — and student leadership and internship programs. Learn more about the institute at www.bakerinstitute.org or on the institute’s blog, http://blog.bakerinstitute.org.