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Middle East

Energy Infrastructure in Crosshairs as US-Israel Iran War Enters Fourth Week

What Happened

Notable events in the US-Israel Iran war over the past week:

  • President Trump’s ultimatum of Friday March 20 to “obliterate” the Iranian electricity grid has now been expanded twice and is tentatively set to expire on April 6.
  • Confusion frequently loomed over possible negotiations between the US and Iran over the course of the week. President Trump claimed several times that talks were ongoing; the Iranians denied any direct contacts taking place. Delays and uncertainty surrounding the official Iranian response to President Trump’s ceasefire proposal may be the effect of decapitation strikes on regime decision-making. Through to Sunday, Trump was framing an Iranian decision to allow 20 tankers through the Strait of Hormuz as proof of a diplomatic process between Washington and Tehran.
  • Pakistan was at the center of diplomatic efforts during the week, first in attempting direct mediation between Washington and Tehran, and later in a more tangible effort to form a united front with Turkey, Saudi Arabia, and Egypt aimed at de-escalating the conflict.
  • The Pentagon announced on March 24 that 2,000 soldiers from the Army’s 82nd Airborne Division were being dispatched to unknown bases in the Middle East. There are now 50,000 US troops in the Middle East – 10,000 more than the usual level.
  • WTO Deputy Director-General Jean-Marie Paugam sounded the alarm over fertilizer prices on March 24, warning that the impact from the current blockade will compound in the year to come: “harvests shrink, prices rise.”
  • Around 30-40% of Gulf refining capacity has been destroyed in the war so far, as per March 25 comments from France Finance Minister Roland Lescure.
  • Israeli officials stated on March 27 that attacks on Iran will “escalate and expand.” Hours later, US Secretary of State Marco stated that the US operation would conclude in “weeks, not months,” continuing recent messaging divergence between the two allies.
  • The IDF struck two Iranian nuclear facilities on March 27: the Khandab heavy water reactor at Arak and the uranium enrichment facility at Ardakan. The IRGC denounced the attacks as targeting “industrial centers” and vowed to respond in kind.