Blain’s Morning Porridge Extra – Quick take on Israeli strike on Iran

The Israeli strike on Iran has roiled markets. Not unexpected, but the consequences could have been much worse if the Israelis had used low-yield Tactical Nuclear Bunker Busters.

This morning’s attack by the Israeli Air Force on Iran’s Military Command and Control, and Nuclear Facilities, has triggered a 12.5% up-spike in Oil Prices. Gold has risen and is pushing towards $3500.

As always, the Israeli operation looks to have been thoroughly planned and comprehensive – striking sites across the country. The attacks are likely to continue to diminish the long-term threat of Tehran acquiring Nukes. The Mullahs have promised dire revenge – and will be urgently seeking the latest Chinese long-range missiles to defend themselves.

As it became clear Iran planned to open new processing facilities and was taking in Chinese supplied ballistic missile components, there was a rising certainty the Israelis would strike. It became a when not if scenario.

It could have been worse. The Israelis attacked with conventional weapons. The fear was IAF could have used a low yield tactical nuclear Bunker-Buster to take out Iran’s nuclear enrichment plants and ballistic weapons research built beneath mountains near Tehran. Penetrator weapons effectively burrow below the surface meaning a 300-600 ton bomb – tiny by nuke standards but just as symbolic – could have sufficed.

The consequences of a tactical nuclear strike would have been multiple:

  • It would have forced the Gulf States to take sides – they quietly support action against Iran, but had it been nuclear strike by Israel, that would have forced them to react. That could have seen oil prices spike much higher with the multiple economic consequences that will raise.
  • An Israeli nuclear strike would have cleared the path for Putin to use, or threaten, immediate tactical strikes on Ukraine.
  • It would have given China grounds to intervene with “compassionate” aid – reinforcing its reputation among emerging nations as the emerging global hegemon at a time when America has become increasingly unpredictable under Trump.

The risk of nuclear escalation remains significant as Israel seeks to swiftly destroy Iran’s capabilities, and as Putin seeks to break the stalemate in Ukraine.

The implications and consequences of higher oil prices will be mixed. Higher prices will be inflationary – but the USA is well postitioned to weather the energy cost effects. Higher energy prices will benefit Russia to a limited extent and punish Europe.

Next few days will be interesting….

Full Morning Porridge to follow.

 

Bill Blain

Author of the Morning Porridge

Founder and CEO of Windshift Capital

Partner Shard Capital

One Comment

  1. david murrin June 13, 2025 at 8:36 am

    Morning Bill on the money as ever a quick thought-

    The Global Forecaster, having predicted the preemptive strike, assesses that the markets and the world will perceive this as a one-off strike, and that following an Iranian retaliation, the conflict will likely subside.
    However, we predict that this is a very different scenario, as the IDF will need multiple strikes to destroy Iran’s nuclear, weapons and missile programs.

    Without a nuclear program, the Iranian regime will collapse, so it will fight to the death.
    As such, this strike is now shaping into an existential battle between Israel and the IRGC-backed religious regime in Tehran, and there is a high probability that it will escalate further into a fully blown regional war.
    We also assess that this could be a larger Catalyst for Chain to initiate its war in Asia.
    For more information, contact https://www.davidmurrin.co.uk/engage-david

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