Breakingviews - Iran attack shunts Gulf into more volatile realm
LONDON, June 13 (Reuters Breakingviews) - The Middle East has taken one of its periodic lurches into turmoil. Earlier this week, impending talks between the United States and Iran raised the prospect of a nuclear deal that would have eased tensions in the region. A series of strikes by Israel on the Islamic Republic on Friday morning mean that's off the table.
Any talk of stability in the Middle East rings hollow given Israel's near two-year campaign in Gaza, that region's unfolding humanitarian crisis, direct military strikes between Israel and Iran, and attacks by Iran-aligned Houthis on ships in the Red Sea.
But U.S. President Donald Trump's recent tour of Saudi Arabia, Qatar and the United Arab Emirates, plus his decision to lift sanctions on Syria, had pointed to a less fraught future. A U.S. deal to curtail the capability of Tehran to build nuclear weapons would have cemented relative regional peace, which in turn would help to enable inward investment in Saudi Arabia and other Gulf countries as they seek to wean their economies off oil. That's a bigger prize for Saudi Crown Prince Mohammed bin Salman than settling old scores with Tehran.
Much depends on how and where Iran responds. One option is that Tehran restricts its retaliation to Israel, as it did in April and October last year when responding to Israeli strikes which targeted the leadership of Iranian proxies like Hezbollah. Right now that's the outcome oil traders seem to be betting on. The price of a barrel of Brent crude was up just 6% at $74 on Friday morning - roughly the same level as in March and the autumn of last year, and far off the spike above $120 a barrel that followed Russia's invasion of Ukraine in 2022. Saudi and the United Arab Emirates collectively have 4 million barrels a day of spare capacity to deploy, while the International Energy Agency expects, opens new tab global supply to grow by 1.6 million barrels daily this year, more than twice the increase in demand. In other words, there's plenty of scope for the global economy to avoid an oil shock.
Still, it's equally possible that Iran sees Israel's strikes as a calculated extension of its negotiations with Trump – who used a social media post, opens new tab on Friday to urge a deal - and decides to respond by targeting U.S. military bases in Qatar and Bahrain. That could spark a regional struggle that might threaten the flow of oil through the Strait of Hormuz, through which a fifth of the world's daily supply passes, choke off Iranian crude exports of 1.5 million barrels per day, and chill foreign investment in the Gulf. The risk that the latest flare-up in the Middle East turns into something more prolonged and economically problematic is clear – and arguably underpriced.
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It will help us build a huge customer database," he added, pointing out DAZN had recouped some of its outlay by regionally sub-licensing rights to some about PIF's subsequent investment in the company, Oliver said: "People always speculate but I can tell you we're not being used as a pawn or anything like that."There was a lot that happened, but these things are not necessarily connected in any way. The investment we had from PIF was around a general investment, but also specifically to establish a partnership for the Middle East and North Africa region."We're an independent company... we're making our own decisions."PIF declined to comment, but sports business expert Callum McCarthy says their investment in DAZN "is expected to result in a Saudi-based sports broadcaster that will rival Qatar's beIN Sports across the Middle East."Saudi Arabia has wanted to own a sports broadcaster for well over a decade and has never really known how to pull it off," he says. 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Fifa, the source said, would have initially been hoping to attract more interest from broadcasters and sponsors, but may have sought help from the Saudis."Sport in the kingdom is still largely known for boxing and horse racing," they said."With Al-Hilal involved in the Club World Cup, this helps establish the country as a footballing nation ahead of the World Cup in 2034, in a way that Qatar failed to do for 2022."Involvement in the Club World Cup may help tempt some players to join the Saudi Pro League. They'll be hoping it brings football to a wider public in their own country, and helps to tackle low attendances at some games."It is notable that Saudi club Al-Ahli has already booked a place in the 2029 Club World Cup. 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Environmental campaign groups are also vehemently opposed to a competition that has gone from seven matches in a single city to 63 matches across 11 nothing else, this Club World Cup could reveal just how much more expansion the game is capable of, and willing to accept.
