Nuclear Fallout

Shaul Mofaz is Israel's minister of transportation. He formerly served as the IDF chief of staff and as defence minister. He is hardly considered to have been one of the greats to occupy either post. Another position he currently holds is that of minister in charge of the strategic dialogue with the US. The very existence of this position is emblematic of the dysfunctionality of Israel's political system right now (ordinarily the role would be part of the mandate of the defence or foreign minister, but was somehow attached to the transportation minister's portfolio as a sinecure handed out by the prime minister to prevent the politically stroppy Mofaz from sulking off and causing coalition problems.)

Nevertheless, in charge of strategic dialogue with the US he is, and so when, in an interview with Israel's largest circulation daily Yediot Ahronot, Mofaz said "attacking Iran, in order to stop its nuclear plans, will be unavoidable", the world took notice. The full interview was published on Sunday and Mofaz expanded on the theme:

If Iran continues its programme to develop nuclear weapons, we will attack it. The window of opportunity has closed. The sanctions are not effective. There will be no alternative but to attack Iran in order to stop the Iranian nuclear programme.

Crude oil prices rose to record heights last Friday at $139 per barrel, and American consumers faced yet another increase in gas prices, with the average gallon of gas exceeding $4 at the pump. The global aftershocks were not insignificant. For instance, India saw a backlash against the government's decision to restrict fuel subsidies with widespread protests in Hyderabad and Kolkata, and lorry drivers in some European countries went on strike.

Were Mofaz's threatening words the sole factor that drove up oil prices? Probably not.

Most news outlets were reporting that a combination of expectations for sustained rising prices throughout the summer, along with the concurrent trend of a weakening US dollar, were also important factors. But was there a causality at work here between what Mofaz said and the spike in the cost of barrels of oil? Almost certainly yes. As a leading Israeli economic analyst Sever Plotzker concluded:

Blathering away about how "we'll attack and destroy you" does not deter the decision-makers in Tehran, but it does drive the oil markets crazy.

There was clearly a domestic political context to the Israeli minister's comments in his newspaper interview. Prime Minister Ehud Olmert is embroiled in corruption investigations, and leadership elections for the governing Kadima party are likely to be held in the near future. Mofaz will contest those elections for Kadima's top slot, and by extension, for the premiership. Like many others, Mofaz left the Likud party to join Kadima. Part of the Mofaz appeal will be to the more Likudist trend within Kadima and the broader Israeli public, and so the chest-thumping general plays nicely into this theme, especially when his main rival is the current foreign minister Tzipi Livni, considered to be more moderate and pragmatic. Mofaz has also spoken of his opposition to Israeli withdrawal from the Golan Heights, and has even suggested that he and his family will move there (while still promising peace with Syria -- go figure!), and is a rightist on Palestinian issues, too. But as Yossi Verter, a leading political commentator for Haaretz, wrote:

On one hand, that is impressive productivity; on the other, it is scary. What is he planning for us during the real campaign... A world war? A clash of Titans?

The Mofaz campaign has all the trappings of being very old-school, both in its message -- military not political solutions -- and in its methods -- machine politics with a whiff of corruption -- signing up workers in employment sectors close to the minister's portfolio to the Kadima party (such as bus company workers and dockworkers, who are decisively effected by the minister's decisions). So in both these respects, message and method, Mofaz is indistinguishable from his alma mater the Likud party.

Mofaz's statement in his interview was roundly criticised in Israel, including in official circles. In general, Israel has tried to fashion itself as part of an international coalition on Iran, rather than a lone actor.

So what else happened as a consequence of Mofaz's remark and the subsequent rise in oil prices? Well, Iran can now expect another increase in windfall profits from oil revenues. Karim Sadjadpour, a colleague who is an Iran expert at the Carnegie Endowment for International Peace, estimates that Iran may net a further $11bn, give or take, thanks to Mofaz.

And here's an interesting biographical detail about Shaul Mofaz: he is actually Iranian by birth.

Can it be? Mofaz must have known that his comments would cause an oil price rise and that this would help Iran. So is this an Israeli minister acting with dual loyalty and serving the interest of Iran?

Well no, I think not. But Iran nonetheless benefited from his comments: financially, to the tune of almost four years worth of American military aid to Israel, and diplomatically, as Iran garnered international attention through a letter of protest to the UN security council.

This and other episodes of sabre-rattling have had the added impact of serving to strengthen the hard-liners in Tehran and rally the public around the flag -- something that overshadows the failings of Mahmoud Ahmadinejad's own economic policies. In this respect, Mofaz's statement was just one in a litany of warrior comments -- unconstructive and self-defeating -- that several Israeli and American politicians in particular have been serving up on a regular basis.

Ratcheting up the threatening rhetoric can become a self-fulfilling prophecy. Military action against Iran would have appalling consequences across the region and beyond. But expect a sticky next few months. Responsible voices in the international community and from within the politics of the key protagonists will need to be permanently on guard and step up their game during this period. If these months can be successfully navigated, then the more promising policy option of broad-ranging direct US diplomatic engagement with Iran, backed by smarter containment, might finally be tried.