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Middle East Eye
02-07-2025
- Business
- Middle East Eye
Israel's economy can't survive a long war with Iran - and Trump knows it
Iran's recent campaign of strikes against Israel has redrawn the theatre of conflict, shifting away from kinetic warfare alone towards a strategic offensive against the economic and financial infrastructure underpinning Israeli state power. What began as a retaliatory strike has become a multidimensional assault, aiming not only to inflict immediate costs but also to destabilise the fiscal and logistical foundations of Israel's war economy. The missile strike targeting the home of Dani Naveh, CEO of the Development Corporation for Israel, commonly known as Israel Bonds, was no coincidence. Naveh is not merely a bureaucratic figurehead - he is the architect of Israel's global bond sales operation. Since October 2023, his leadership has driven over $5bn in capital inflows from diaspora and institutional buyers, including $1.7bn from US public bodies. These bonds, insulated from secondary markets and sold directly, have become a critical fiscal artery for a state at war. By striking Naveh, Tehran targeted Israel's debt-raising mechanism at its most vulnerable point: investor confidence. New MEE newsletter: Jerusalem Dispatch Sign up to get the latest insights and analysis on Israel-Palestine, alongside Turkey Unpacked and other MEE newsletters In doing so, it signalled to global markets that no Israeli economic or financial node is immune. This is not merely a disruption of personnel - it is an attempt to discredit Israel's entire wartime financial scaffolding. Simultaneously, Iran's attacks on Tel Aviv's financial district and Haifa's strategic port and refinery infrastructure suggest a doctrine of coherent financial attrition. The twin strikes - cyber and kinetic - disrupted refinery operations critical to both industrial and civilian energy supply. Israel, already strained by soaring wartime expenditure, must now contend with fuel bottlenecks and cascading costs across its logistics and production chains. Maritime chokehold The most consequential blow to Israel's economy came through the global maritime sector. On 20 June, Maersk, the world's largest container shipping firm, announced the suspension of all vessel calls at Israel's Port of Haifa. The move, triggered by the risk of further Iranian retaliation, turned threat into market exclusion. No naval blockade was declared, yet the effect was the same. With insurance premiums on Israeli-bound shipments soaring past one percent of vessel value, Israel's maritime economy entered a de facto embargo. Shipping giant Maersk's exit from Haifa severed Israel's maritime lifeline, turning threat into a de facto embargo This disruption dwarfs the earlier Red Sea shipping crisis caused by the Houthi blockade. The Bab al-Mandab chokepoint merely rerouted cargo. Maersk's exit from Haifa severed it altogether. Haifa is Israel's principal Mediterranean gateway for industrial machinery, pharmaceuticals, and strategic imports. Without it, the Israeli economy becomes brittle and prone to inflation. Import costs have increased, and inventory gaps are expected to widen. The government will be forced to subsidise logistics at enormous fiscal cost or rely on substandard shipping firms operating under flag-of-convenience regimes. Only after the ceasefire brokered by US President Donald Trump was announced did Maersk confirm it would resume vessel calls at the Port of Haifa, reopening both import and export services. Nonetheless, the pressure during the clash was significant and prevented Israel from ignoring the cost of its war. Strategic resilience Iran, in contrast, has spent minimally to achieve maximal disruption. Its missile operations, estimated at $2bn to $3bn, are structured as strategic investments. The government has preserved macroeconomic stability through tight currency controls, off-market oil diplomacy, and selective austerity. Iran won this war with defiant strikes. Israel lost Read More » By weaponising psychological deterrence, Tehran has achieved what years of sanctions could not: making Israel's financial ecosystem appear unstable, vulnerable, and fundamentally unsustainable. Iran has long lived under sanctions and siege, and has developed the capacity to endure such conditions for decades. This has given it a hardened resilience that decisively outmatches Israel's war economy, which is deeply dependent on global capital markets, western political backing, and short-cycle military dominance. Unlike Israel, which cannot sustain prolonged disruption without risking economic and political breakdown, Iran's system is built for survival through attrition. Its strategic patience, forged through decades of pressure, gives it a deeper national resolve that threatens to outlast and wear down the Israeli state's ability to finance and justify an extended war. Fiscal freefall Israel's economic crisis is not just one of cost but of confidence. The shekel has depreciated steadily since October 2023. Bond yields are rising. Credit default swaps are pricing in elevated risk. Foreign investment is drying up. Small and medium-sized enterprises are folding. Credit ratings have been downgraded. Follow Middle East Eye's live coverage of the Israel-Palestine war Lost working hours across cities under alert have translated into productivity shocks and tax shortfalls. Unemployment is rising. Public anger is growing. The government's response - raising the value-added tax, slashing social spending, and issuing more domestic debt - is not a recovery plan. It is fiscal triage. Education, health, and public infrastructure spending are being cannibalised to fund ongoing military operations. The long-term costs will outlast the war. Human capital is eroding. Capital and human flight is intensifying. Trust in the state's economic management is faltering. And now, for the first time in half a century, Israel has issued an international plea not for arms, but for cash. Tel Aviv has formally requested that Gulf states, Germany, Britain, and France contribute economic aid to sustain its wartime footing. This is not strategic outreach - it is an admission of exhaustion. The war is no longer financially containable within Israeli borders. This appeal also lays bare an uncomfortable contradiction: a state that celebrated economic self-reliance has become dependent on external infusion just to remain solvent. This is not fiscal resilience - it is financial collapse in slow motion. Opportunistic gambit Iran's strategy has delivered its most significant result yet - not the destruction of Israeli military assets, but the destabilisation of its war-financing apparatus. The strikes have triggered a wider unravelling of shipping corridors, bond markets, investor sentiment, and public confidence. Israel is not just fighting on seven military fronts. It is now fighting for economic survival. The Iranian attack on Israel has paradoxically helped Prime Minister Benjamin Netanyahu deflect mounting domestic criticism by reframing the conflict as an existential national struggle rather than a political liability. Trump's recent moves reflect not strategic generosity but an opportunistic gambit to reassert American influence across the Middle East However, the limited success of the US strike on Iran's nuclear facility on 22 June underscores that this is not a war of quick victories, but one of attrition, where strategic resolve will ultimately determine the outcome. The ceasefire that concluded the latest round of hostilities between Iran and Israel does not signify resolution, but recalibration. In the vacuum of mutual exhaustion, the US, under Trump, has seized the opportunity to reposition itself not merely as an arbiter but as the architect of the post-conflict regional order. Trump's recent moves reflect not strategic generosity but an opportunistic gambit, capitalising on Iran's strategic gains and Israel's fiscal exhaustion to reassert American influence across the Middle East by reshaping infrastructure, economic dependencies, and political alignments. A pivotal development preceding the escalation was Iran's inauguration of a direct railway link to China, reducing shipping times to approximately 15 days. More significantly, it facilitates transactions beyond the reach of dollar-based financial systems and sanctions enforcement. By embedding itself within China's Belt and Road Initiative, Iran signalled a deliberate move to reorient its economic future away from the western-led order. The subsequent joint US-Israeli strikes against Iranian infrastructure suggest that this infrastructural pivot - rather than nuclear enrichment alone - was partially perceived as a primary threat. American designs Following the ceasefire, the US has adopted a transactional approach to contain further Iranian gains. The Trump administration's decision to allow Chinese refiners to resume purchases of Iranian oil, since revoked, reflects a calculated use of selective relief to slow Iran's strategic deepening with China. This is not a concession but an attempt to draw Iran into financial arrangements governed by US institutions, thereby preserving a degree of control over its liquidity and trade exposure. In parallel, the US has intensified its use of multilateral finance as a strategic tool against Iran. The India-Middle East Corridor: A new Silk Route or diplomacy by PowerPoint? Read More » The World Bank's electricity grant to Syria, although framed as a development initiative, serves to weaken Iran's influence over the future of Syria. Similar efforts are underway in Lebanon, targeting Hezbollah's parallel service networks. These moves are designed to stabilise the architecture underpinning the Abraham Accords. With Israel facing fiscal strain and declining deterrence credibility, regional calm is crucial to preserving economic integration with Gulf states and protecting the viability of projects like the India-Middle East-Europe Economic Corridor. Iran's capacity to disrupt shipping lanes and energy flows has underscored the fragility of these initiatives. In sum, the US is pursuing a strategy of infrastructural counterweight and institutional encirclement. It seeks to neutralise Iran's strategic momentum not through escalation, but through selective accommodation, economic instruments, and containment. This approach marks a shift from military dominance to structural influence, aimed at managing, rather than resolving, the contradictions of the current regional order. Through initiatives like the Abraham Shield plan, the US hopes to transform Israel's wartime momentum into a durable order anchored in strategic deterrence, economic integration and political normalisation. The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Eye.
Saba Yemen
22-03-2025
- Politics
- Saba Yemen
Sana'a: Honorable Stances with Palestine and a Haven for the Free People of the World
Sana'a – Saba: The Yemeni people continue to prove, time and again throughout their ancient and modern history, that they are resilient against conspiracies and will never succumb to external hegemony, regardless of the aggressors' arrogance. History testifies that Yemen has always been, and will remain, the graveyard of invaders and occupiers. After a decade of war and blockade imposed by the US-Saudi-UAE coalition since March 26, 2015, the aggression has failed to break Yemen's will. Despite the vast resources spent to destroy its infrastructure, Yemen has emerged more resilient. The aggression, which has resulted in the worst humanitarian catastrophe in modern history, entered a renewed phase in March 2025. However, after bitter experiences, Washington, Riyadh, and Abu Dhabi have reaped nothing but defeats, disgrace, and shame. Before this period, Yemen was under foreign tutelage, treated as a mere backyard for global powers. But with the September 21, 2014 Revolution, the equation shifted, and Yemen's decision-making became independent and firmly in the hands of its people. Today, under the leadership of Sayyed Abdulmalik Badr al-Din al-Houthi and Yemen's free people, the nation has overcome many challenges and now possesses advanced military capabilities that can deter its enemies. Alongside its military strength, Yemen has also taken an unwavering stance in supporting Palestine, reaffirming it as the central cause of the Muslim Ummah. The Arab-Israeli conflict remains ongoing, particularly after the 'Al-Aqsa Flood' operation. The Zionist-American enemy continues to target the region and the Axis of Resistance. The renewed US aggression against Yemen and the Zionist assault on Gaza is merely part of a broader battle, one that is destined to end in victory for the resistance forces, with Yemen at the forefront. Yemen's steadfast support for Palestine stems from a deep-rooted sense of dignity, faith, and unwavering conviction. This commitment has frustrated the US administration, prompting figures like Donald Trump to issue empty threats in an attempt to deter Yemen from enforcing its naval blockade on Israeli-bound ships. Following US threats and its military strikes on civilian areas in Sana'a and other provinces, Yemen responded swiftly by targeting the USS Harry Truman aircraft carrier and its accompanying destroyers four times within 72 hours. This demonstrated Yemen's refusal to submit to intimidation and its unwavering support for Gaza, regardless of the cost. Analysts view the latest US strikes on Yemen as a dangerous escalation that could lead to a broader regional conflict. They also highlight the predicament faced by **President Trump**, especially given Sana'a's firm stance on continuing to target Israeli-bound vessels until the Zionist blockade on Gaza is lifted. Thanks to its brave and principled stance, Yemen has become a beacon for free people worldwide, a force capable of reshaping the balance of power in favor of the oppressed. The influx of Arab, Islamic, and international delegations to Sana'a for the Third Conference on "Palestine: The Central Cause of the Ummah" stands as a testament to this growing influence. E.M Whatsapp Telegram Email Print more of (Local)
Al Bawaba
20-03-2025
- Politics
- Al Bawaba
New U.S. airstrikes pound Yemen, targeting many areas
ALBAWABA- The United States launched four airstrikes on the Al-Katheeb area in the Mina district, along with attacks on Al-Asayed in Al-Safraa, Sa'dah, as part of its ongoing military campaign against Yemen, according to Ansar Allah-affiliated, Houthi media. Also Read U.S. renews airstrikes on Sana'a, injuring 7 women The U.S. airstrikes, which have continued since Sunday, follow President Donald Trump's announcement of a "decisive operation" against the Houthis after designating them a global terrorist organization. Washington cited the group's military actions in the Red Sea and Arabian Sea, as well as its blockade of Israeli-bound vessels in support of Gaza, as threats to maritime security and Israel, its closest ally in the region. The recent wave of strikes has hit multiple Yemeni governorates, including Sana'a, Hodeida, Taiz, Amran, Hajja, Al-Bayda, Dhamar, Ma'rib, and Al-Jawf. The bombings have resulted in dozens of deaths and injuries, including women and children, while also causing widespread destruction to civilian infrastructure. On Wednesday, U.S. airstrikes on a wedding hall under construction in Sana'a left seven women and two children wounded, further devastating the surrounding neighborhood.
Russia Today
18-03-2025
- Politics
- Russia Today
Pentagon threatens ‘overwhelming, lethal force' against Houthis
Washington will continue to strike Houthi militants until they cease their attacks on US Navy ships protecting commercial vessels off Yemen's coast, the Pentagon's new spokesman Sean Parnell has said during his first briefing. On Saturday, US President Donald Trump threatened the Houthis with 'powerful military action' aimed at restoring freedom of navigation in the Red Sea. Since October 2023, the Ansar Allah movement, commonly known as the Houthis, have launched multiple drones and missiles at Israeli-bound commercial vessels off Yemen's coast, disrupting key shipping routes in the Red Sea and the Gulf of Aden. The group said that it is acting in support of the Palestinians amid Israel's military operation in Gaza. During his briefing on Monday, Parnell insisted that the US will keep using 'overwhelming, lethal force' against the Houthis until they stop targeting American warships. He blamed the group for carrying out a total 170 attacks against US Navy ships and 145 against commercial vessels. 'There is a very clear end-state to this operation, and that begins the moment that the Houthis pledge to stop attacking our ships and putting American lives at risk,' he said. The spokesman stressed that the Yemeni militants 'could stop this tomorrow… but they have clearly chosen not to do that.' Because of this, the US 'campaign will be relentless to degrade their capability,' Parnell warned. Air Force Lieutenant General Alexus Grynkewich, director of operations for the Joint Chiefs of Staff, said during the same briefing that the 'initial wave' of US strikes had hit more than 30 targets at multiple locations inside Yemen, inducing training sites, drone infrastructure, arms depots and command-and-control centers. On Monday, Trump claimed that the Houthi attacks 'emanate from, and are created by, Iran,' warning that from now on, Washington would view every shot fired by the Yemeni group as if it was fired by Tehran. 'Iran will be held responsible, and suffer the consequences, and those consequences will be dire,' the president wrote on his Truth Social platform. Tehran, which has consistently denied any involvement in the Houthis operations, condemned the US bombing of Yemen as a blatant violation of the UN Charter and a major threat to regional and international peace and security. The Houthis said the same day that despite the US strikes, they will keep targeting vessels off Yemen's coast 'until aid and basic needs are delivered to the Gaza Strip.'
Russia Today
18-03-2025
- Politics
- Russia Today
Pentagon threatens to use ‘overwhelming, lethal force' against Houthis
Washington will continue to strike Houthi militants until they cease their attacks on US Navy ships protecting commercial vessels off Yemen's coast, the Pentagon's new spokesman Sean Parnell has said during his first briefing. On Saturday, US President Donald Trump threatened the Houthis with 'powerful military action' aimed at restoring freedom of navigation in the Red Sea. Since October 2023, the Ansar Allah movement, commonly known as the Houthis, have launched multiple drones and missiles at Israeli-bound commercial vessels off Yemen's coast, disrupting key shipping routes in the Red Sea and the Gulf of Aden. The group said that it is acting in support of the Palestinians amid Israel's military operation in Gaza. During his briefing on Monday, Parnell insisted that the US will keep using 'overwhelming, lethal force' against the Houthis until they stop targeting American warships. He blamed the group for carrying out a total 170 attacks against US Navy ships and 145 against commercial vessels. 'There is a very clear end-state to this operation, and that begins the moment that the Houthis pledge to stop attacking our ships and putting American lives at risk,' he said. The spokesman stressed that the Yemeni militants 'could stop this tomorrow… but they have clearly chosen not to do that.' Because of this, the US 'campaign will be relentless to degrade their capability,' Parnell warned. Air Force Lieutenant General Alexus Grynkewich, director of operations for the Joint Chiefs of Staff, said during the same briefing that the 'initial wave' of US strikes had hit more than 30 targets at multiple locations inside Yemen, inducing training sites, drone infrastructure, arms depots and command-and-control centers. On Monday, Trump claimed that the Houthi attacks 'emanate from, and are created by, Iran,' warning that from now on, Washington would view every shot fired by the Yemeni group as if it was fired by Tehran. 'Iran will be held responsible, and suffer the consequences, and those consequences will be dire,' the president wrote on his Truth Social platform. Tehran, which has consistently denied any involvement in the Houthis operations, condemned the US bombing of Yemen as a blatant violation of the UN Charter and a major threat to regional and international peace and security. The Houthis said the same day that despite the US strikes, they will keep targeting vessels off Yemen's coast 'until aid and basic needs are delivered to the Gaza Strip.'
