Advertisement
U.S. markets open in 3 hours 39 minutes
  • S&P Futures

    5,206.00
    -8.75 (-0.17%)
     
  • Dow Futures

    39,175.00
    -48.00 (-0.12%)
     
  • Nasdaq Futures

    18,194.25
    -37.25 (-0.20%)
     
  • Russell 2000 Futures

    2,042.60
    -7.20 (-0.35%)
     
  • Crude Oil

    82.47
    -0.25 (-0.30%)
     
  • Gold

    2,156.80
    -7.50 (-0.35%)
     
  • Silver

    25.11
    -0.15 (-0.61%)
     
  • EUR/USD

    1.0839
    -0.0038 (-0.35%)
     
  • 10-Yr Bond

    4.3400
    0.0000 (0.00%)
     
  • Vix

    14.58
    +0.25 (+1.74%)
     
  • GBP/USD

    1.2672
    -0.0057 (-0.44%)
     
  • USD/JPY

    150.6380
    +1.5400 (+1.03%)
     
  • Bitcoin USD

    63,717.77
    -4,282.85 (-6.30%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,718.51
    -4.04 (-0.05%)
     
  • Nikkei 225

    40,003.60
    +263.20 (+0.66%)
     

Israel-Iran Tensions a Political “Minefield” for Obama: Eurasia Group’s Gordon

Follow Yahoo!'s The Daily Ticker on Facebook here!

President Obama met with Israel Prime Minister Benjamin Netanyahu in Washington Monday to discuss the high stakes issue of Iran's nuclear program and Israel's declaration that it will do everything in its power, including military action, to prevent the Islamic country from getting a nuclear weapon. To date, intelligence reports from both American and European assessments show no indication that Iran has in fact decided to pursue a nuclear weapon.

Obama's meeting with Netanyahu comes just one day after he gave a speech on the same subject to the American Israel Public Affairs Committee (AIPAC), the largest pro-Israel lobbying group in the United States. The President said he is committed to standing by Israel but feels all options, including diplomacy and sanctions, must be exhausted first before any call to war.

"Already, there is too much loose talk of war," said Obama. "Over the last few weeks such talk has only benefited the Iranian government by driving up the price of oil, which they depend on to fund their nuclear program."

Oil prices are up 41% since October and 8.1% year-to-date, partially as a result of rising tensions in Iran. The average price of gas is up almost $0.50 since January to $3.78 a gallon for regular unleaded, according to AAA.com.

Helping push oil prices higher are Iran's threats in recent months to block the crucial Strait of Horumuz, the only waterway to the open ocean for many of the largest Middle East oil producers. So far that has not happened, but last month Iran did announce it was blocking shipments of oil to France and Britain as a preemptive response to the European Union's planned Iran oil embargo set for this summer. (See: The Looming Threat to Gas Prices: Straight of Hormuz Explained)

"What the president is trying to do is walk this very, very fine line between reassuring the Israelis that at the end of the day he will be there for them and that Iran will not be aloud to get a nuclear weapon -- while at the same time trying to avoid a situation where the price of oil shoots up high," says David Gordon, head research for Eurasia Group. ""If on the other hand, tensions get too high and the price of oil begins to rise that could put the economy at risk and it could enable whoever is the Republican candidate, probably Mitt Romney, to focus in on energy policies and attack the administration that way."

Indeed, in Monday's meeting with Netanyahu, President Obama sought to walk this fine line by declaring "the United States will always have Israel's back when it comes to Israel's security." But the President once again sought to dampen the rhetoric, saying there is "still a window that allows for a diplomatic resolution," Reuters reports.

Obama's Biggest Political Vulnerability

Gordon believes the Israel-Iran situation could end up being the determining factor in Obama's re-election bid. "How he handles this issue, I think, is in many ways his biggest political vulnerability," says Gordon. "If he mishandles the issue and looks to soft on Iran, he really gives the Republicans a foreign policy issue that they can jump on both with Jewish voters who are very important in a number of key states but also in a range of voters in America."

On Sunday, at least, Obama did sound resolute in his remarks to do what it takes to keep both Israeli and American interests secure. "I will not hesitate to use force when it is necessary to defend the United States and its interests," he said.

But the Republican presidential candidates believe Obama is all bark and no bite and used the Sunday talk shows and the campaign circuit to speak out on this issue. Newt Gingrich said the U.S. was "being played for fools" on the issue of Iran's nuclear capability while GOP front-runner Mitt Romney concluded that if Obama gets re-elected, it would lead to Iran inevitably obtaining a nuclear weapon. (The two candidates, along with Rick Santorum, will speak before AIPAC on Tuesday.)

"This is a minefield for President Obama, but I have to say I think that he has handled it well in the last couple of days and I suspect that the spin coming out of today's meeting is going to be Netanyahu and Obama look like they are getting more on the same page," says Gordon. "[But] Netanyahu is not going to step back from his commitment to ultimately be the man who controls the trigger on Israeli nuclear strikes. He will not give the president a firm 'no Mr. President, I won't do that.'"

It seems that the Israelis want the Iranians to believe wholeheartedly that they will attack. The same sentiment goes for the U.S. "Americans don't want Israel to strike, but they do want the Iranians to believe that Israel may strike," says Gordon.

As for Iran, Gordon does not believe it "is easy for them to calibrate" all this tough rhetoric. "They are looking for a way to definitely avoid war but they don't want to give up their nuclear program either and this is going to be high politics over the next six months for sure," he says.

Advertisement