The assassination of General Qassem Soleimani has created much speculation about the possible impact on oil markets and – although any impact will very much depend upon what happens next in terms of political and military responses – theoretically the potential exists for Iran to seriously destabilize oil markets, raising oil prices.

Arguably, it would be in Iran’s interest to do so. It would certainly hurt Trump’s possibility of a second term if higher prices were to last for some time as the 2020 presidential election gets underway. And it would also help shore up Iran’s failing economy. 

The assassination did initially cause oil prices to rise by a few dollars before quickly falling back, and the missile attacks by Iran produced a similar response. However, direct action by Iran to raise prices – for example by trying to close the Strait of Hormuz – is unlikely.

Around one-fifth of the world's oil supplies passes through the Strait of Hormuz, a narrow choke point between Iran and the Arabian Peninsula. Closing it would invite serious military action by the Americans and many of its allies who, so far, have been rather lukewarm over Trump’s actions. It would also possibly limit Iran’s own oil exports.

Similarly, overt attacks on American allies in the region such as Saudi Arabia and the UAE would probably invite too heavy a reaction, although this is uncertain given the lack of response after the alleged Iranian attacks on Abqaiq and Khurais in mid-September.

Indirect action by Iran to affect oil supplies is much more likely as they have many options by using their proxies to affect others’ oil production. This is especially true for Iraq, which is now an important source of global oil supply as Iraqi exports in 2019 averaged 3.53 million barrels per day (Mb/d), a significant amount.

Iraq’s future production has already been damaged as international oil companies are withdrawing staff for safety reasons, anticipating potential attacks by both Iraqi and Iranian sources. It is now very unlikely that the crucial ‘common seawater supply project’ being run by Exxon – essential for expanding production capacity – will go ahead in the near future.

However, one important consequence of the assassination that has attracted little attention is that it has almost fully restored the role of geopolitics into the determination of oil prices. Up to 2014, geopolitics played a key role in determining oil prices in the paper markets where perceptions and expectations ruled.

Prices determined in these markets – NYMEX in New York, ICE in London and other lesser futures markets throughout the world – then influence wet barrel markets where real barrels of oil are traded. 

In 2014, the world was so oversupplied with real oil barrels that the oil price collapsed – the price of Brent crude fell from $110.72 on 23 May to $46.44 eight months later. Thereafter, little if any attention was given to geopolitical events, and geopolitics became marginalized in the determination of crude oil prices.

This began to change in 2019. The market remained physically over-supplied but events in the Gulf began to attract attention. In June, there were a series of attacks on oil tankers close to the Gulf, followed by attacks on Saudi Arabia’s Abqaiq processing facility and the Khurais oil field in September.

The Americans claimed these attacks were launched by Iran, but no convincing evidence for the claim was provided. Both attacks produced an initial price response but it was surprisingly limited and short-lived. However, it did suggest that geopolitics might be creeping back into influencing oil prices.

This became ever more noticeable in the third and fourth quarters as rumours regarding the trade talks between China and US clearly began to affect price – talks going well meant higher oil demand, and prices rose; talks going badly meant lower oil demand, and prices fell.

Meanwhile, the oil market showed signs of tightening towards the end of 2019. Although there was much cheating on the OPEC+ agreement that was trying to restrain production and protect prices, the OPEC meeting last December saw both Iraq and Nigeria agreeing to restrain production. 

US stock levels also began to fall in December and the futures markets began to price in a tightening market towards the end of 2020. Significantly, the tighter the market appears, the greater attention is paid to the level of spare producing capacity.

Just before the attack on Abqaiq, the International Energy Agency (IEA) estimated there was 3.5 Mb/d spare capacity in OPEC which, historically, is quite comfortable. However, 2.5 of this was estimated to be in Saudi Arabia, so how much of this spare capacity still existed after the Abqaiq attack?

The Saudis claimed the Abqaiq capacity was quickly restored but technical experts greeted this with considerable skepticism, not least because the Abqaiq equipment was highly specialized. If spare capacity is tight, this makes the oil price vulnerable to geopolitical scares and rumours, real or imagined. 

Although the assassination of General Soleimani has exacerbated the sensitivity of oil markets to geopolitical events, this becomes irrelevant if a serious shooting war starts in the region. Saudi Arabia, the UAE and Iraq’s oil infrastructure remains highly vulnerable to attack either directly by Iran or one of its many proxies, suggesting oil prices will become increasingly volatile but, at the same time, benefit from a rising geopolitical premium.

As tensions escalate in the Middle East, US President Donald Trump has threatened to strike targets in Iran should they seek to retaliate over the killing of Qassem Soleimani. According to the president’s tweet, these sites includes those that are ‘important to Iran and Iranian culture’.

Defense Secretary Mark Esper was quick on Monday to rule out any such action and acknowledged that the US would ‘follow the laws of armed conflict’. But Trump has not since commented further on the matter.

Any move to target Iranian cultural heritage could constitute a breach of the international laws protecting cultural property. Attacks on cultural sites are deemed unlawful under two United Nations conventions; the 1954 Hague Convention for the Protection of Cultural Property during Armed Conflict, and the 1972 UNESCO World Heritage Convention for the Protection of the World Cultural and Natural Heritage.

These have established deliberate attacks on cultural heritage (when not militarily necessary) as a war crime under the Rome Statute of the International Criminal Court in recognition of the irreparable damage that the loss of cultural heritage can have locally, regionally and globally.

These conventions were established in the aftermath of the Second World War, in reaction to the legacy of the massive destruction of cultural property that took place, including the intense bombing of cities, and systematic plunder of artworks across Europe. The conventions recognize that damage to the cultural property of any people means ‘damage to the cultural heritage of all mankind’. The intention of these is to establish a new norm whereby protecting culture and history – that includes cultural and historical property – is as important as safeguarding people.

Such historical sites are important not simply as a matter of buildings and statues, but rather for their symbolic significance in a people’s history and identity. Destroying cultural artefacts is a direct attack on the identity of the population that values them, erasing their memories and historical legacy. Following the heavy bombing of Dresden during the Second World War, one resident summed up the psychological impact of such destruction in observing that ‘you expect people to die, but you don’t expect the buildings to die’.

Targeting sites of cultural significance isn’t just an act of intimidation during conflict. It can also have a lasting effect far beyond the cessation of violence, hampering post-conflict reconciliation and reconstruction, where ruins or the absence of previously significant cultural monuments act as a lasting physical reminder of hostilities.

For example, during the Bosnian War in the 1990s, the Old Bridge in Mostar represented a symbol of centuries of shared cultural heritage and peaceful co-existence between the Serbian and Croat communities. The bridge’s destruction in 1993 at the height of the civil war and the temporary cable bridge which took its place acted as a lasting reminder of the bitter hostilities, prompting its reconstruction a decade later as a mark of the reunification of the ethnically divided town.

More recently, the destruction of cultural property has been a feature of terrorist organizations, such as the Taliban’s demolition of the 1,700-year-old Buddhas of Bamiyan in 2001, eliciting international condemnation. Similarly, in Iraq in 2014 following ISIS’s seizure of the city of Mosul, the terrorist group set about systematically destroying a number of cultural sites, including the Great Mosque of al-Nuri with its leaning minaret, which had stood since 1172. And in Syria, the ancient city of Palmyra was destroyed by ISIS in 2015, who attacked its archaeological sites with bulldozers and explosives.

Such violations go beyond destruction: they include the looting of archaeological sites and trafficking of cultural objects, which are used to finance terrorist activities, which are also prohibited under the 1954 Hague Convention.

As a war crime, the destruction of cultural property has been successfully prosecuted in the International Criminal Court, which sentenced Ahmad Al-Faqi Al-Mahdi to nine years in jail in 2016 for his part in the destruction of the Timbuktu mausoleums in Mali. Mahdi led members of Al-Qaeda in the Islamic Maghreb to destroy mausoleums and monuments of cultural and religious importance in Timbuktu, irreversibly erasing what the chief prosecutor described as ‘the embodiment of Malian history captured in tangible form from an era long gone’.

Targeting cultural property is prohibited under customary international humanitarian law, not only by the Hague Convention. But the Convention sets out detailed regulations for protection of such property, and it has taken some states a lot of time to provide for these.

Although the UK was an original signatory to the 1954 Hague Convention, it did not ratify it until 2017, introducing into law the Cultural Property (Armed Conflicts) Act 2017, and setting up the Cultural Protection Fund to safeguard heritage of international importance threatened by conflict in countries across the Middle East and North Africa.

Ostensibly, the UK’s delay in ratifying the convention lay in concerns over the definition of key terms and adequate criminal sanctions, which were addressed in the Second Protocol in 1999. However, changing social attitudes towards the plunder of antiquities, and an alarming increase in the use of cultural destruction as a weapon of war by extremist groups to eliminate cultures that do not align with their own ideology, eventually compelled the UK to act.

In the US, it is notoriously difficult to get the necessary majority for the approval of any treaty in the Senate; for the Hague Convention, approval was achieved in 2008, following which the US ratified the Convention in 2009.

Destroying the buildings and monuments which form the common heritage of humanity is to wipe out the physical record of who we are. People are people within a place, and they draw meaning about who they are from their surroundings. Religious buildings, historical sites, works of art, monuments and historic artefacts all tell the story of who we are and how we got here. We have a responsibility to protect them.

The assassination of General Qassem Soleimani has created much speculation about the possible impact on oil markets and – although any impact will very much depend upon what happens next in terms of political and military responses – theoretically the potential exists for Iran to seriously destabilize oil markets, raising oil prices.

Arguably, it would be in Iran’s interest to do so. It would certainly hurt Trump’s possibility of a second term if higher prices were to last for some time as the 2020 presidential election gets underway. And it would also help shore up Iran’s failing economy. 

The assassination did initially cause oil prices to rise by a few dollars before quickly falling back, and the missile attacks by Iran produced a similar response. However, direct action by Iran to raise prices – for example by trying to close the Strait of Hormuz – is unlikely.

Around one-fifth of the world's oil supplies passes through the Strait of Hormuz, a narrow choke point between Iran and the Arabian Peninsula. Closing it would invite serious military action by the Americans and many of its allies who, so far, have been rather lukewarm over Trump’s actions. It would also possibly limit Iran’s own oil exports.

Similarly, overt attacks on American allies in the region such as Saudi Arabia and the UAE would probably invite too heavy a reaction, although this is uncertain given the lack of response after the alleged Iranian attacks on Abqaiq and Khurais in mid-September.

Indirect action by Iran to affect oil supplies is much more likely as they have many options by using their proxies to affect others’ oil production. This is especially true for Iraq, which is now an important source of global oil supply as Iraqi exports in 2019 averaged 3.53 million barrels per day (Mb/d), a significant amount.

Iraq’s future production has already been damaged as international oil companies are withdrawing staff for safety reasons, anticipating potential attacks by both Iraqi and Iranian sources. It is now very unlikely that the crucial ‘common seawater supply project’ being run by Exxon – essential for expanding production capacity – will go ahead in the near future.

However, one important consequence of the assassination that has attracted little attention is that it has almost fully restored the role of geopolitics into the determination of oil prices. Up to 2014, geopolitics played a key role in determining oil prices in the paper markets where perceptions and expectations ruled.

Prices determined in these markets – NYMEX in New York, ICE in London and other lesser futures markets throughout the world – then influence wet barrel markets where real barrels of oil are traded. 

In 2014, the world was so oversupplied with real oil barrels that the oil price collapsed – the price of Brent crude fell from $110.72 on 23 May to $46.44 eight months later. Thereafter, little if any attention was given to geopolitical events, and geopolitics became marginalized in the determination of crude oil prices.

This began to change in 2019. The market remained physically over-supplied but events in the Gulf began to attract attention. In June, there were a series of attacks on oil tankers close to the Gulf, followed by attacks on Saudi Arabia’s Abqaiq processing facility and the Khurais oil field in September.

The Americans claimed these attacks were launched by Iran, but no convincing evidence for the claim was provided. Both attacks produced an initial price response but it was surprisingly limited and short-lived. However, it did suggest that geopolitics might be creeping back into influencing oil prices.

This became ever more noticeable in the third and fourth quarters as rumours regarding the trade talks between China and US clearly began to affect price – talks going well meant higher oil demand, and prices rose; talks going badly meant lower oil demand, and prices fell.

Meanwhile, the oil market showed signs of tightening towards the end of 2019. Although there was much cheating on the OPEC+ agreement that was trying to restrain production and protect prices, the OPEC meeting last December saw both Iraq and Nigeria agreeing to restrain production. 

US stock levels also began to fall in December and the futures markets began to price in a tightening market towards the end of 2020. Significantly, the tighter the market appears, the greater attention is paid to the level of spare producing capacity.

Just before the attack on Abqaiq, the International Energy Agency (IEA) estimated there was 3.5 Mb/d spare capacity in OPEC which, historically, is quite comfortable. However, 2.5 of this was estimated to be in Saudi Arabia, so how much of this spare capacity still existed after the Abqaiq attack?

The Saudis claimed the Abqaiq capacity was quickly restored but technical experts greeted this with considerable skepticism, not least because the Abqaiq equipment was highly specialized. If spare capacity is tight, this makes the oil price vulnerable to geopolitical scares and rumours, real or imagined. 

Although the assassination of General Soleimani has exacerbated the sensitivity of oil markets to geopolitical events, this becomes irrelevant if a serious shooting war starts in the region. Saudi Arabia, the UAE and Iraq’s oil infrastructure remains highly vulnerable to attack either directly by Iran or one of its many proxies, suggesting oil prices will become increasingly volatile but, at the same time, benefit from a rising geopolitical premium.

After a summer of regional tensions and continued uncertainty regarding the future of the JCPOA, the Chatham House MENA Programme held a closed workshop to examine the impact of the Trump administration’s maximum pressure campaign.

Discussions focused on the domestic developments and challenges inside Iran, prospects for new negotiations with Iran, and the regional issues facing the country. Participants also considered the differences between American and European approaches towards Iran.

In the face of the COVID-19 pandemic, many global leaders have invoked war analogies – from the Pearl Harbor attack to the collective spirit on display during the Second World War – to highlight past lessons learned or rally their populations.

For Iran’s leadership, more recent war analogies hold resonance and help explain the ideological and political conundrum limiting an effective COVID-19 response. While the Islamic Republic has weathered a multitude of challenges, COVID-19 is putting unprecedented strain on Iran’s already fragile, heavily-sanctioned economy and further exposing domestic political fissures amid ongoing international tensions.

Iran has been identified as the regional epicentre of the pandemic with a steadily rising number of deaths, including several of the country’s political and military elite. Yet the Iranian government has not evoked the collective memory of the war as an opportunity for national resistance and mobilization.

Sluggish and poorly managed

This is unsurprising, because thus far the Iranian government’s response to COVID-19 has been sluggish and poorly managed. After an initial slow response, Iran then attempted to downplay the impact of the virus, covering up the number of cases and deaths and blaming the United States, before implementing a poorly coordinated action plan marred by government infighting.

For the Iranian leadership, the Iran-Iraq war has been the single most influential and defining period – it has impacted its political ideology, domestic and security policies and international relations. More than half a million Iranians died, and a paranoid worldview and sense of isolation was cemented among many elite leaders such as Supreme Leader Ali Khamenei.

The war created a valiant culture of leadership from Qassem Soleimani to presidents Mahmoud Ahmadinejad and Hashemi Rafsanjani and, over time, has resulted in the development of Iran’s asymmetrical defense capabilities.

The war enabled a dark purge of political opponents and the gradual birth of Iran’s reformist faction, all while the ethos of sacrifice and martyrdom was linked to the collective notions of resistance.

These would be carried forward in other resistance campaigns both regional and economic. Most defining was Ayatollah Khomeini’s infamous 1988 decision to ‘drink the poisoned chalice’ and end the long war. Three decades later, Iran continues to contend with those outcomes.

To acknowledge that the COVID-19 crisis could have equally profound consequences would add further pressure to the Islamic Republic at a time of incomparable vulnerability. Even before this crisis, the Iranian government linked sanctions to economic warfare, making future negotiations conditional on sanctions relief.

Iranian hardliners used the opportunity to promote Iran’s subsistence-based resistance economy designed to insulate Iran’s economy from external shocks such as sanctions. While both groups recognize the economic urgency, their contending strategies help explain the muddled government response and the ongoing ideological competition between the political elites.

Rouhani has argued that a full lockdown of the Iranian economy is impossible because it is already under significant strain from sanctions - the Iranian economy experienced a 9.5% contraction in 2019 and is expected to worsen in the coming year.

That said, through Iran’s New Year holidays the government did take action to slow the spread of the virus, discouraging travel and shutting schools, pilgrimage sites and cancelling Friday prayers. Finally, on 4 April, after receiving permission from Khamenei to do so, Rouhani withdrew $1 billion from Iran’s National Development Fund and is distributing the money through loans and credits to 23 million households.

Aid from a number of Iran’s parastatal agencies was also announced. Conversely, in his annual New Year’s speech the supreme leader securitized the crisis by laying blame on the United States for spreading the virus as a form of biological terrorism. Iran’s army chief of staff Major General Bagheri was tasked with building hospitals and the Islamic Revolution Guard Corps given authority to clear the streets.

The recent expulsion of Médecins Sans Frontières from Iran highlights the mix of paranoia and resistance culture still on display. US sanctions on Iran have significantly weakened Iran’s economy and limited Tehran’s ability to purchase much needed medical supplies and equipment. Unable to access its foreign reserves due to sanctions, the Rouhani government has applied for a $5 billion loan from the IMF.

European countries alongside a number of US members of congress have appealed to the Trump administration to ease sanctions on humanitarian grounds. While Washington continues to pursue its steadfast approach, referring to Iran’s campaign as a ‘sanctions relief scam’, Germany, France, and the UK have offered $5 million in aid and launched INSTEX – a trading mechanism designed to circumvent sanctions to allow non-sanctioned humanitarian trade.

The impact of coronavirus on Iranian society remains to be seen. But the impact of sanctions has placed heavy economic and psychological burden on the people. Feeling abandoned by the Iranian state and the United States could produce a mix of contradictory nationalistic and independent impulses.

The social contract – already fragile amid protests and government repression – reveals declining trust. Without national mobilization and calls for unity reminiscent of the war period, Iranians have stepped in, highlighting the continued resilience of civil society. Support for the medical establishment has been celebrated throughout the country and on social media. Charities, the private sector - through one initiative known as Campaign Nafas (Breathe) - and diaspora groups have initiated fundraising drives and assistance measures.

Iran’s relations with the international community, and specifically the United States, remain an unresolved consequence of the war. The 2015 Iranian nuclear agreement was the closest Tehran and Washington came to resolving decades of tensions, containment and sanctions.

COVID-19 has further heightened the trajectory of tensions between Tehran and Washington suggesting that any new deal, while necessary, is not on the cards. Tit-for-tat military exchanges have been on the rise in Iraq and Yemen while American and Iranian leaders issue threats and warnings of potential escalation.

Abdullah Nasseri, an advisor to Iran’s reformists, recently stated that in order to manage the coronavirus crisis, the Iranian government needed to make a decision akin to the 1988 United Nations resolution 598 that ended war hostilities. Ayatollah Khomeini famously commented on that ceasefire, stating: ‘Happy are those who have departed through martyrdom. Unhappy am I that I still survive.… Taking this decision is more deadly than drinking from a poisoned chalice. I submitted myself to Allah's will and took this drink for His satisfaction’. 

While a similar compromise today might appear deadly to the political establishment, it is clear that a paradigm shift away from the shadows of Iran’s last war is urgently needed to manage the challenges stemming from COVID-19.

In the face of the COVID-19 pandemic, many global leaders have invoked war analogies – from the Pearl Harbor attack to the collective spirit on display during the Second World War – to highlight past lessons learned or rally their populations.

For Iran’s leadership, more recent war analogies hold resonance and help explain the ideological and political conundrum limiting an effective COVID-19 response. While the Islamic Republic has weathered a multitude of challenges, COVID-19 is putting unprecedented strain on Iran’s already fragile, heavily-sanctioned economy and further exposing domestic political fissures amid ongoing international tensions.

Iran has been identified as the regional epicentre of the pandemic with a steadily rising number of deaths, including several of the country’s political and military elite. Yet the Iranian government has not evoked the collective memory of the war as an opportunity for national resistance and mobilization.

Sluggish and poorly managed

This is unsurprising, because thus far the Iranian government’s response to COVID-19 has been sluggish and poorly managed. After an initial slow response, Iran then attempted to downplay the impact of the virus, covering up the number of cases and deaths and blaming the United States, before implementing a poorly coordinated action plan marred by government infighting.

For the Iranian leadership, the Iran-Iraq war has been the single most influential and defining period – it has impacted its political ideology, domestic and security policies and international relations. More than half a million Iranians died, and a paranoid worldview and sense of isolation was cemented among many elite leaders such as Supreme Leader Ali Khamenei.

The war created a valiant culture of leadership from Qassem Soleimani to presidents Mahmoud Ahmadinejad and Hashemi Rafsanjani and, over time, has resulted in the development of Iran’s asymmetrical defense capabilities.

The war enabled a dark purge of political opponents and the gradual birth of Iran’s reformist faction, all while the ethos of sacrifice and martyrdom was linked to the collective notions of resistance.

These would be carried forward in other resistance campaigns both regional and economic. Most defining was Ayatollah Khomeini’s infamous 1988 decision to ‘drink the poisoned chalice’ and end the long war. Three decades later, Iran continues to contend with those outcomes.

To acknowledge that the COVID-19 crisis could have equally profound consequences would add further pressure to the Islamic Republic at a time of incomparable vulnerability. Even before this crisis, the Iranian government linked sanctions to economic warfare, making future negotiations conditional on sanctions relief.

Iranian hardliners used the opportunity to promote Iran’s subsistence-based resistance economy designed to insulate Iran’s economy from external shocks such as sanctions. While both groups recognize the economic urgency, their contending strategies help explain the muddled government response and the ongoing ideological competition between the political elites.

Rouhani has argued that a full lockdown of the Iranian economy is impossible because it is already under significant strain from sanctions - the Iranian economy experienced a 9.5% contraction in 2019 and is expected to worsen in the coming year.

That said, through Iran’s New Year holidays the government did take action to slow the spread of the virus, discouraging travel and shutting schools, pilgrimage sites and cancelling Friday prayers. Finally, on 4 April, after receiving permission from Khamenei to do so, Rouhani withdrew $1 billion from Iran’s National Development Fund and is distributing the money through loans and credits to 23 million households.

Aid from a number of Iran’s parastatal agencies was also announced. Conversely, in his annual New Year’s speech the supreme leader securitized the crisis by laying blame on the United States for spreading the virus as a form of biological terrorism. Iran’s army chief of staff Major General Bagheri was tasked with building hospitals and the Islamic Revolution Guard Corps given authority to clear the streets.

The recent expulsion of Médecins Sans Frontières from Iran highlights the mix of paranoia and resistance culture still on display. US sanctions on Iran have significantly weakened Iran’s economy and limited Tehran’s ability to purchase much needed medical supplies and equipment. Unable to access its foreign reserves due to sanctions, the Rouhani government has applied for a $5 billion loan from the IMF.

European countries alongside a number of US members of congress have appealed to the Trump administration to ease sanctions on humanitarian grounds. While Washington continues to pursue its steadfast approach, referring to Iran’s campaign as a ‘sanctions relief scam’, Germany, France, and the UK have offered $5 million in aid and launched INSTEX – a trading mechanism designed to circumvent sanctions to allow non-sanctioned humanitarian trade.

The impact of coronavirus on Iranian society remains to be seen. But the impact of sanctions has placed heavy economic and psychological burden on the people. Feeling abandoned by the Iranian state and the United States could produce a mix of contradictory nationalistic and independent impulses.

The social contract – already fragile amid protests and government repression – reveals declining trust. Without national mobilization and calls for unity reminiscent of the war period, Iranians have stepped in, highlighting the continued resilience of civil society. Support for the medical establishment has been celebrated throughout the country and on social media. Charities, the private sector - through one initiative known as Campaign Nafas (Breathe) - and diaspora groups have initiated fundraising drives and assistance measures.

Iran’s relations with the international community, and specifically the United States, remain an unresolved consequence of the war. The 2015 Iranian nuclear agreement was the closest Tehran and Washington came to resolving decades of tensions, containment and sanctions.

COVID-19 has further heightened the trajectory of tensions between Tehran and Washington suggesting that any new deal, while necessary, is not on the cards. Tit-for-tat military exchanges have been on the rise in Iraq and Yemen while American and Iranian leaders issue threats and warnings of potential escalation.

Abdullah Nasseri, an advisor to Iran’s reformists, recently stated that in order to manage the coronavirus crisis, the Iranian government needed to make a decision akin to the 1988 United Nations resolution 598 that ended war hostilities. Ayatollah Khomeini famously commented on that ceasefire, stating: ‘Happy are those who have departed through martyrdom. Unhappy am I that I still survive.… Taking this decision is more deadly than drinking from a poisoned chalice. I submitted myself to Allah's will and took this drink for His satisfaction’. 

While a similar compromise today might appear deadly to the political establishment, it is clear that a paradigm shift away from the shadows of Iran’s last war is urgently needed to manage the challenges stemming from COVID-19.

On Thursday, the US House of Representatives passed a resolution affirming its authority under the War Powers Resolution Act, and reminding the president, the American people and the world that when it comes to the use of military force, Congress must be taken into account. 

President Donald Trump replied by retweeting John Bolton, his former national security advisor, who tweeted that the War Powers Act was ‘unconstitutional’, effectively dismissing Congressional efforts to rein in the president.

This round of legal Twitter diplomacy came days after the president tweeted that ‘legal notice (to Congress) is not required, but it is given nevertheless’ and that ‘should Iran strike any US person or target, the United States will quickly and fully strike back, and perhaps in a disproportionate manner.’ 

President Trump’s overt attacks on Congressional authority and disregard for the law are not normal for a US president, but legal constraints over the president’s authority to use military force have been eroding for several years.

In 1973, Congress passed the War Powers Act, requiring the president to report to Congress and acquire Congressional approval for continued overseas troop deployments. But Congressional authority over the use of military force has continued to diminish, especially since the 9/11 attacks. 

Now, Congress is pushing back – a resolution similar to that passed by the House is likely to be voted on by the Senate soon. Given the intense frustration of some senators over the president’s handling of the current conflict, this resolution may pass, though the president is still likely to veto. 

The bigger problem, of which this is one part, is the expansion of executive authority, and it predates this presidency. Many argue that executive power is greatest on matters of foreign policy, and that in this domain the US president is unconstrained. As partisanship has increased and the demands on Congress have made it harder for its members to cultivate foreign policy expertise, the power of the president has grown.

So the fact that Congress is taking active steps to check the president’s power not only on the question of impeachment, but also on foreign policy, is significant, even if the law is not likely to restrain President Trump. But Congress is also playing a long game. And its growing determination to assert its authority matters not only for this presidency, but also for the future.

Political constraints

In the short term, other constraints matter more. Even if President Trump rejects legal restraints – and shuns diplomatic pressure that might have mattered to other presidents – he is not impervious to political restraint.

Already there are signs that Trump listens to his key Republican allies in Congress. When Senator Lindsay Graham pushed back against the president’s threat to attack cultural heritage sites in Iran, and the Pentagon failed to shore up the president’s threat, the president changed his position. The threats also provoked an overwhelming response in Europe, and across the Middle East, but the president has shown that he is willing to disregard international admonishment. Not so for domestic allies.

Nor is this the first time that Senator Graham’s views have mattered. When the president announced his decision to pull troops from northeast Syria, effectively abandoning the Kurds, a key partner to the US in its fight against ISIS, Senator Graham and Senator Mitch McConnell pushed back and it mattered. 

Public opinion also matters to the president, especially Republican public opinion, and this is likely to affect the president’s next steps. Recent polls suggest that Americans feel less safe as a result of the killing of General Qassem Soleimani by a considerable margin of 55% to 24%.

But the same survey also shows that a majority of Americans support the decision to kill Soleimani. Already Vice President Mike Pence has spoken at a rally in Ohio designed to bolster support for this Presidential action.  

So what might change public opinion and will this alter the president’s future steps?

Americans are very reluctant to support further deployments of troops overseas. President Trump knows this and he has consistently stated that he seeks to pull US troops out of the Middle East.

In fact, the opposite has happened. And once again, the decision to kill General Soleimani is pulling the US further into the Middle East and putting into stark light the inconsistency of Trump’s foreign policy ambitions. In recent days, the United States has committed to sending thousands of troops to the region.

Continued US troop deployments may not play well with Trump’s base, though they currently support his Iran policy. But absent an obvious justification, this could change, so it is not surprising that this has become a rallying point for Vice President Pence.

An even greater political risk, and one that will matter to the president, is the risk to US military personnel and civilians overseas. Public support for the killing of Soleimani and increased US presence in the region is bound to dissipate if Americans are killed.

But it isn’t clear how the president will respond, and already the death of one American in the militia attack on 27 December seems to have been a critical factor in Trump’s decision to authorize the assassination of General Soleimani.  

So far, Iran’s response appears to be calibrated to avoid this kind of public backlash, and keep the door open to some sort of managed resolution of the current crisis.

But the considerable risk of miscalculation and mistakes has already been born out. A week after the killing of Soleimani, the world is tuning in to the tragic news that a civilian airliner departing Iran for Ukraine appears to have been accidentally shot down by an Iranian missile, resulting in the deaths of all 176 people on board, including 82 Iranians and 63 Canadians.

Whether the US president is constrained is a critical question for Americans, for US democracy and for the rest of the world. Trump is different, but he is not unconstrained. Steps taken by Congress along with diplomatic and political pressure mean he is still operating within boundaries. But it is clear that these boundaries are being redefined.

Conventional wisdom says that foreign policy takes a backseat role in US elections. But last autumn’s Democratic primary debates suggest a potential shift is taking place in the conventional view. While healthcare dominated the discussion (Democrats attribute their 2018 midterm gains to the issue), through November foreign policy followed closely behind in second place in terms of minutes devoted to the discussion.

This trend is consistent with President Donald Trump’s America First approach to foreign policy, in which an eye is always kept on how decisions abroad play for the domestic audience. One former Trump administration official has called this dynamic the ‘recoupling’ of foreign policy with domestic policy.

The US–China trade conflict, which commanded headlines throughout 2019, is perhaps the best example of this recoupling, tying trade imbalances less with the geopolitical than with domestic impact on farmers. Immigration is another policy area in which Trump has linked domestic implications and indeed domestic opinion with foreign policy. It’s in the title: America First.

Now, for better or worse, the targeted killing of Qassem Soleimani, Iran’s response and the subsequent fallout may make US foreign policy towards Iran and the US role in the Middle East a central issue for the 2020 US elections. As it comes just ahead of the Democratic presidential primaries, voters will be looking to the candidates to differentiate their foreign policy experience and proposals for America’s Middle East policy.

To President Donald Trump, Soleimani’s assassination represents a campaign promise kept to confront Iran’s aggression.

The Trump administration initially justified the action by citing intelligence of an imminent threat to US personnel and targets, but after Defense Secretary Mark Esper called this into question, Trump tweeted that ‘it doesn’t really matter because of [Soleimani’s] horrible past’. Ultimately, Trump’s message, on the campaign trail and any general debate stage he agrees to be on, is that he has overseen a new national security strategy for Iran.

Soleimani’s removal from the Iranian calculus is just a part of this broader policy, which also includes neutralizing the Iranian government’s destabilizing influence in the Middle East, denying Iran and especially the Islamic Revolutionary Guard Corps’ access to funding for its malign activities, and rallying the international community against domestic human rights violations and unjust detentions.

To counter Trump, Democrats and democratic presidential candidates would be best-served by offering a simple argument that too links domestic interests and foreign policy: the killing of Soleimani and Trump’s national security strategy for Iran have not made the US or its interests safer.

Iran’s ballistic missile attack on US forces in Iraq, which Iran’s Supreme Leader Ayatollah Ali Khamenei called a ‘slap in the face’ for the US, makes the risks to US assets and personnel abundantly clear. Even if Iran reverts entirely to covert, proxy efforts to counter US interests, the current US–Iran tensions remain unresolved and will likely continue to persist through the 2020 elections in November.

As a matter of the first order, Soleimani was replaced by his deputy Brigadier General Esmail Ghaani within a day of the former’s death, with Khamenei saying that the Quds Force will be ‘unchanged’.

At the second order, Iraq’s parliament voted in favour of a nonbinding resolution to rescind the invitation to US forces, which led Trump to threaten sanctions and demands for reimbursement. Whether US troops will ultimately leave Iraq (following a ‘mistaken’ report that the US was preparing to depart) remains to be seen, but the destabilization of the US military presence in Iraq fulfils a key Iranian objective.

In the interim, the US-led coalition in Iraq and Syria fighting ISIS announced that it would at least temporarily cease its counterterrorism efforts to instead fortify its outposts and prepare for Iranian retaliation, opening a wider door for the resurgence of the terror group.

By arguing that the US, its troops and interest have not been made safer by Trump’s Middle East policy – from withdrawing from the Iran nuclear deal to the imposition of a ‘maximum pressure campaign’ to Soleimani’s killing – Democrats will be able to point to every post-Soleimani US injury, death, regional terrorism attack, asset compromise, cyberattack and shipping disruption as evidence.

Democratic presidential candidates also ought to be explicit about how they plan to manage tensions with Iran – strategic, diplomatic and military – particularly their position on the future of the nuclear deal.

Iran has made clear that the path to de-escalation is through sanctions relief. Asserting leverage need not always involve taking away all of your counterparty’s options (‘maximum pressure’). It also involves knowing what your adversary wants (sanctions relief) and showing a willingness to offer it (especially where it means less to you) in exchange for something of greater worth (avoiding war/a non-nuclear Iran).

Clarity around future policy of a potential Democratic president may bring de-escalation forward in a way that Trump’s statement of Iran standing down are unlikely to do.

After a summer of regional tensions and continued uncertainty regarding the future of the JCPOA, the Chatham House MENA Programme held a closed workshop to examine the impact of the Trump administration’s maximum pressure campaign.

Discussions focused on the domestic developments and challenges inside Iran, prospects for new negotiations with Iran, and the regional issues facing the country. Participants also considered the differences between American and European approaches towards Iran.

The assassination of General Qassem Soleimani has created much speculation about the possible impact on oil markets and – although any impact will very much depend upon what happens next in terms of political and military responses – theoretically the potential exists for Iran to seriously destabilize oil markets, raising oil prices.

Arguably, it would be in Iran’s interest to do so. It would certainly hurt Trump’s possibility of a second term if higher prices were to last for some time as the 2020 presidential election gets underway. And it would also help shore up Iran’s failing economy. 

The assassination did initially cause oil prices to rise by a few dollars before quickly falling back, and the missile attacks by Iran produced a similar response. However, direct action by Iran to raise prices – for example by trying to close the Strait of Hormuz – is unlikely.

Around one-fifth of the world's oil supplies passes through the Strait of Hormuz, a narrow choke point between Iran and the Arabian Peninsula. Closing it would invite serious military action by the Americans and many of its allies who, so far, have been rather lukewarm over Trump’s actions. It would also possibly limit Iran’s own oil exports.

Similarly, overt attacks on American allies in the region such as Saudi Arabia and the UAE would probably invite too heavy a reaction, although this is uncertain given the lack of response after the alleged Iranian attacks on Abqaiq and Khurais in mid-September.

Indirect action by Iran to affect oil supplies is much more likely as they have many options by using their proxies to affect others’ oil production. This is especially true for Iraq, which is now an important source of global oil supply as Iraqi exports in 2019 averaged 3.53 million barrels per day (Mb/d), a significant amount.

Iraq’s future production has already been damaged as international oil companies are withdrawing staff for safety reasons, anticipating potential attacks by both Iraqi and Iranian sources. It is now very unlikely that the crucial ‘common seawater supply project’ being run by Exxon – essential for expanding production capacity – will go ahead in the near future.

However, one important consequence of the assassination that has attracted little attention is that it has almost fully restored the role of geopolitics into the determination of oil prices. Up to 2014, geopolitics played a key role in determining oil prices in the paper markets where perceptions and expectations ruled.

Prices determined in these markets – NYMEX in New York, ICE in London and other lesser futures markets throughout the world – then influence wet barrel markets where real barrels of oil are traded. 

In 2014, the world was so oversupplied with real oil barrels that the oil price collapsed – the price of Brent crude fell from $110.72 on 23 May to $46.44 eight months later. Thereafter, little if any attention was given to geopolitical events, and geopolitics became marginalized in the determination of crude oil prices.

This began to change in 2019. The market remained physically over-supplied but events in the Gulf began to attract attention. In June, there were a series of attacks on oil tankers close to the Gulf, followed by attacks on Saudi Arabia’s Abqaiq processing facility and the Khurais oil field in September.

The Americans claimed these attacks were launched by Iran, but no convincing evidence for the claim was provided. Both attacks produced an initial price response but it was surprisingly limited and short-lived. However, it did suggest that geopolitics might be creeping back into influencing oil prices.

This became ever more noticeable in the third and fourth quarters as rumours regarding the trade talks between China and US clearly began to affect price – talks going well meant higher oil demand, and prices rose; talks going badly meant lower oil demand, and prices fell.

Meanwhile, the oil market showed signs of tightening towards the end of 2019. Although there was much cheating on the OPEC+ agreement that was trying to restrain production and protect prices, the OPEC meeting last December saw both Iraq and Nigeria agreeing to restrain production. 

US stock levels also began to fall in December and the futures markets began to price in a tightening market towards the end of 2020. Significantly, the tighter the market appears, the greater attention is paid to the level of spare producing capacity.

Just before the attack on Abqaiq, the International Energy Agency (IEA) estimated there was 3.5 Mb/d spare capacity in OPEC which, historically, is quite comfortable. However, 2.5 of this was estimated to be in Saudi Arabia, so how much of this spare capacity still existed after the Abqaiq attack?

The Saudis claimed the Abqaiq capacity was quickly restored but technical experts greeted this with considerable skepticism, not least because the Abqaiq equipment was highly specialized. If spare capacity is tight, this makes the oil price vulnerable to geopolitical scares and rumours, real or imagined. 

Although the assassination of General Soleimani has exacerbated the sensitivity of oil markets to geopolitical events, this becomes irrelevant if a serious shooting war starts in the region. Saudi Arabia, the UAE and Iraq’s oil infrastructure remains highly vulnerable to attack either directly by Iran or one of its many proxies, suggesting oil prices will become increasingly volatile but, at the same time, benefit from a rising geopolitical premium.