Quiver Quantitative - Tensions escalate in the Middle East as Israel gears up for an extensive ground assault in the Gaza Strip. This preparation follows a series of provocative actions by Hamas, including the threat to execute Israeli hostages in retaliation for the bombardment of civilians. In response, the Pentagon has issued stern warnings to Iran and Lebanese militant group Hezbollah, urging them to refrain from joining the conflict, and has signaled its readiness to defend Israel. The situation is further intensified by the U.S. deployment of an aircraft carrier strike force to the Eastern Mediterranean, serving as a clear deterrent against any potential regional escalation.
In a move that underscores the gravity of the situation, Israeli forces have been amassing along the Gaza border. Israeli troops have regained control over towns in the country's south, pushing back against Hamas control. Meanwhile, Israeli Prime Minister Benjamin Netanyahu has proclaimed his intent to unleash an unparalleled offensive against Hamas, equating the group's brutality to the reign of terror seen during the ISIS era. This comes after a staggering death toll over the weekend, with hundreds of Israelis killed, and subsequent Palestinian casualties due to Israeli shelling.
Amidst the spiraling conflict, the broader international community is being drawn in. U.S. President Biden has expressed full support for Israel, directing the Pentagon to supply weaponry, munitions, and equipment. There are also reports of U.S.-produced bombs being deployed in the region. Israel’s actions and preparations suggest anticipation of broader regional escalation, particularly fearing engagement from Hezbollah of Lebanon, another Iran-backed militant group. There are concerns that if Hezbollah were to engage after Hamas's missile onslaught, Israel’s defense systems might be overwhelmed.
However, the ramifications of this conflict are felt well beyond the immediate theater of war. Economically, oil prices are soaring, reflecting concerns over greater instability in the Middle East, a pivotal crude-producing region. The Israeli economy too is grappling with the situation, as its central bank takes drastic measures to stabilize the shekel, which hit a seven-year low against the dollar. As the international community watches with bated breath, major U.S. and international airlines have suspended numerous flights to Israel's primary airport in Tel Aviv.
This article was originally published on Quiver Quantitative