Will the US attack Iran?: 2025.06.12
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In this roundup, we take a closer look at the US decision to reduce non-essential staff levels in the Middle East, which by many is seen as an indication that the US is readying for an attack on Iran.
EPM does not agree with this assessment. The facts are that Trump has been pushing back against the Israel-proposed “bomb them!” policy for Iran. First Trump fired his national security advisor Waltz for supporting the Israeli position too much. Then he fired the people through which Israel influences US policy on Iran. After this, he brought together his own policy people, the MAGA crew, and after their meeting he called Netanyahu to tell him he needs to stop pushing and preparing for an attack on Iran because the US wants an Iran nuclear deal. In this context, it is hard to imagine that Trump will in the end sign off on a military attack on Iran. Therefore, we at EPM see it as most likely that the decision to reduce non-essential staff in the Middle East is designed to intimidate Iran ahead of a next round of negotiations.
Furthermore, we look at:
Japan’s importation of two cargoes of Russian crude oil, on a vessel under sanction; which in the EPM indicates the US is no longer eager to enforce its energy sanctions on Russia
The view that that the crude oil industry is already past its peak, and that the decades to come will only be worse
The numbers that confirm the US’s loss of soft power
The progress towards an Abraham Accord between Israel and Israel
Why companies are dropping environmental goals in larger numbers
The US EPA proposal to repeal rules that limit GHG emissions from power plants fueled by coal and natural gas; which essentially leaves Europe as the only region still concerned about GHG emissions
BYD is trying to push the electrification of transport in Europe forward, through introducing its compact-car segment Dolphin
General Energy
Japan has imported Russian crude oil for the first time in more than two years, delivered on a tanker sanctioned by both the U.S. and the European Union, writes Nikkei Asia. The importer, Taiyo Oil, said the purchase was made on request from the Agency of Natural Resources and Energy, a department under the Ministry of Economy, Trade and Industry (METI). Japan has a waiver from both the U.S. and the EU to receive the oil, but it hadn’t used the waiver in 2 years. In the EPM view this indicates the US is no longer eager to enforce its energy sanctions on Russia.
For as long as most analysts can remember, a rule of thumb has held true, writes Bloomberg. Every year, the world’s production of oil goes up by one million barrels a day. In 1983, the figure stood at 56.6 million barrels. In 2023, 40 years later, it was 40 million barrels more: 96.3 million. But, much of what’s labeled “oil production” today isn’t oil at all, but gases such as ethane, propane and butane as well as biofuels. If you consider only crude oil — the stuff subject to OPEC’s quota policies, with prices quoted on the nightly news — production is barely increasing at all. Global output this year will be just 360,000 daily barrels greater than in 2015, according to the latest outlook from the US government’s Energy Information Administration. The Bloomberg conclusion is that the oil industry is already past its peak. The decades to come will only be worse.
Geopolitics
Throughout the Israeli War on Gaza, EPM has said the US-Israel Alliance is wasting “political capital” for no reason whatsoever, and that it will come to regret the loss of soft power this entails. The latest survey of more than 28,000 people by the Pew Research Center found that opinions of the US under president Trump have worsened over the past year in more than half the 24 countries polled – including falls of 20-plus points in Mexico, Sweden, Poland and Canada, writes The Guardian. The study polled people in Argentina, Brazil, Canada, France, Germany, Greece, Hungary, India, Indonesia, Israel, Italy, Japan, Kenya, Mexico, the Netherlands, Nigeria, Poland, South Africa, South Korea, Spain, Sweden, Turkey and the United Kingdom. Similarly, public support for Israel in western Europe is at the lowest ever recorded, writes The Guardian. Fewer than a fifth of respondents in the six countries polled – UK, France, Germany, Denmark, Spain, Poland – hold a favourable opinion of the country.
As to EPM’s assertion that changes are likely afoot when it comes to US foreign policy, which we wrote about on Monday and Wednesday this week, according to CNN, US president Trump on Monday called Israeli prime minister Netanyahu and told him Trump tells Netanyahu to end the Israeli War on Gaza and stop his threats against Iran.
As to Iran, on Wednesday the US announced it is drawing down the presence of State Department staffers who are not deemed essential to operations in the Middle East, writes the Associated Press. The US embassies in Iraq, Bahrain and Kuwait are affected. President Trump said, “They are being moved out, because it could be a dangerous place, and we’ll see what happens. We’ve given notice to move out, and we’ll see what happens.” Also on Wednesday, a statement from the United Kingdom Maritime Trade Operations center, a Mideast-based effort overseen by the British navy, issued a warning to ships in the region that it “has been made aware of increased tensions within the region which could lead to an escalation of military activity having a direct impact on mariners.” It urged caution in the Persian Gulf, the Gulf of Oman and the Strait of Hormuz. While this development, and the narrative around it, creates the impression the US is preparing for a military attack,
According to the Washington Post, the move is in response to fears that Israel might strike Iran. In recent months, U.S. intelligence officials have grown increasingly concerned that Israel may choose to strike Iran’s nuclear facilities without the consent of the United States, WaPo writes. Such a move would almost certainly scuttle the Trump administration’s delicate nuclear negotiations and prompt an Iranian retaliation on U.S. assets in the region.
Iran-expert Trita Parsi of the Quincy Institute is of the opinion it “is more likely part of the choreography of pressure ahead of the next round of US-Iran talks, than a prelude to Israeli strikes”.
EPM is inclined to agree with Parsi. The facts are that Trump has been pushing back against the Israel-proposed “bomb them!” policy for Iran. First Trump fired his national security advisor Waltz for supporting the Israeli position too much. Then he fired the people through which Israel influences US policy on Iran. After this, he brought together his own policy people, the MAGA crew, and after their meeting he called Netanyahu to tell him he needs to stop pushing and preparing for an attack on Iran because the US wants an Iran nuclear deal. In this context, it is hard to imagine that Trump will in the end sign off on a military attack on Iran. As to the possibility that Israel would “go it alone”, that too at EPM we see as very unlikely. Israel is not oblivious to the fact that the US is the hand that feeds them, and undermining Trump when it comes to Iran would not be taken likely by Trump = just ask Waltz. Furthermore, Israel’s ability to affect Iran’s nuclear program is limited as it does not have the military capabilities to target and destroy Iran’s key facilities that are buried deep underground – only the US has this capability. Therefore, we at EPM see it as most likely that the decision to reduce non-essential staff in the Middle East is designed to intimidate Iran ahead of a next round of negotiations.
The fact that Oman has confirmed the US and Iran will talk again this coming Sunday, as per Reuters, EPM sees as confirmation of our assessment.
As to Syria, Israel is interested in negotiating an updated security deal with the country and working up towards a full peace agreement, writes Axios. Since Al Assad was removed from power, Israel has hit Syria with waves of airstrikes to systematically destroy what was left of the Syrian air force, navy, air defense and missile systems. Israel also took control of the buffer zone between the countries and occupied territory inside Syria, most importantly the remainder of the Golan Heights that Israel had not yet occupied in 1967. In the north of the country, however, Turkey made inroads into Syria. Then when the Trump administration signaled strong support for Syria’s new president Al Sharaa, with Trump meeting him in Saudi and the removal of US sanction on Syria, Israel started engaging with the al-Sharaa government. First indirectly by exchanging messages through third parties and then directly in secret meetings in third countries. This has left Israel convinced that Al Sharaa is someone they can deal with, and they have now asked the US ambassador to Syria, Tom Barrack, to lad negotiations towards a Israel – Syria Abraham Accord. As part of this deal, Israel should be allowed to keep the Golan Heights, US troops are to be stationed on the new Israel – Syria border, and Syria has to commit to a permanent “demilitarization” of southern Syria.
Energy Transition
Companies are dropping environmental goals in larger numbers, writes Bloomberg. In the past year companies around the world have been canceling their climate commitments, some only a few years old. BP is pulling back on renewables and drilling more oil. Coca-Cola and PepsiCo. abandoned or weakened promises they made in 2021 to slash their use of new plastics. Big banks such as Wells Fargo & Co. and HSBC walked back various plans to reduce their emissions. Walmart admits it’s behind on its climate targets, while FedEx says it will likely miss its goal to go electric on half of its delivery truck purchases by 2025. Some environmentalists believe this could be a good thing, as the corporate pullback on voluntary GHG management will now force countries to make decarbonization mandatory. At EPM we think that sounds great. But we have close to zero belief that is what will happen. In our assessment, companies are not making these strategic adjustments in a vacuum. They are taking these decisions because they have noticed that the priority their stakeholders give to GHG emissions management has reduced.
Climate Politics
The US Environmental Protection Agency on Wednesday proposed repealing rules that limit planet-warming greenhouse gas emissions from power plants fueled by coal and natural gas, writes the Associated Press. The EPA also proposed weakening a regulation that requires power plants to reduce emissions of mercury and other toxic pollutants that can harm the brain development of young children and contribute to heart attacks and other health problems in adults.
The Electrification of Transport
BYD is taking its battle for EV affordability into Europe’s compact-car segment, writes the Financial Times. Compact cars have taken longer to shift away from petrol engines due to thin profit margins and the difficulty of making them both affordable and moneymaking with the high price of batteries. BYD has now launched its cheapest and smallest electric vehicle in the UK, the Dolphin Surf, with a starting price of £18,650, is the British equivalent of BYD’s popular Seagull hatchback, which is priced at less than £6,000 in China.