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December 25, 2024
Interceptors

The U.S. Interceptor Shortage and Its Impact

The U.S. interceptor shortage impacts both the response to the Houthi threat and the sleep of millions of Israelis.

Israel and the U.S. are cooperating to address the Houthi threat. However, due to a shortage of interceptors in the U.S. Navy, some missiles are not intercepted far from Israel's borders. This leads to the activation of sirens in Israel, requiring the Israeli Air Force's air defense system to neutralize these threats.

Even the mighty America faces challenges in managing its armament economy. How did it come to this point? Since the early stages of the war, the U.S. has deployed aircraft carriers and Arleigh Burke-class destroyers in the Red Sea, the Gulf of Aden, and the Arabian Sea. These destroyers carry Standard Missile (SM) interceptors capable of neutralizing Houthi-launched missiles during their ascent phase, long before they reach Israel.

These interceptors are quite expensive, costing several million dollars each (more than the Arrow system, though not necessarily superior). However, the shortage isn't due to financial constraints. Throughout the war, American destroyers have had to fire large quantities of these missiles to protect themselves, the aircraft carriers, commercial vessels targeted by the Houthis, and Israel. Additionally, the U.S. assisted Israel in countering Iranian attacks using SM missiles.

These missiles are manufactured by RTX, formerly Raytheon, one of the world's largest defense contractors. Due to their complexity, RTX produces only a few hundred of these missiles each year. The U.S. wasn't prepared for the scenario of two prolonged wars in different parts of the world simultaneously—the war in Ukraine and the war in the Middle East.

Moreover, stock management is also influenced by the possibility of escalation in the Pacific region, between China and Taiwan. Add to this the fact that more than 10 other countries, in addition to the U.S. Navy, have pre-ordered SM interceptors, and you have a shortage of this type of interceptor.

This is likely one of the reasons the U.S. deployed the Terminal High Altitude Area Defense (THAAD) system in Israel. THAAD can also intercept ballistic missiles, but since it is ground-based, it does so toward the end of their flight path—in other words, it doesn’t "prevent" the alarms from sounding.

In conclusion, this isn't a 'punishment' by the Biden administration against Israel. The U.S. continues to assist in defense, though their capabilities have diminished, impacting the sleep of many until the Houthi threat is dismantled.

(Tamir Morag on X)

✍️ @beholdisraelchannel

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🇮🇱 ❌ 🇮🇷 🛢 📈 — Deutsche Bank: Oil Prices will go to $125/barrel if the Iran-Israel conflict spills over into the Straight of Hormuz

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Analysis

Developments in the Iran-Israel war. It is currently 1:11am in Tel Aviv and 1:42am in Tehran.

Main points:

Iran and Israel have started targeting each other’s energy infrastructure.

Iranian missiles continued to target and impact northern and central Israel.

Israel has started targeting Iranian oil infrastructure, including oil refineries and oil depots.

Israeli airstrikes continue to target various parts of Tehran and the surrounding areas.

Iranian air defence seems to finally be doing some damage to Israeli missiles and drones. In turn, Israel has deployed dozens of small quadcopters and loitering munitions to waste Iranian air defence and saturate for larger attacks with cruise missiles.

Drones launched from Iran and factions in Iraq continue to target northern and southern Israel.

Missiles & drones:

2 rockets were launched from the Khan Younis area of southern Gaza by an unknown Palestinian faction. Neither were intercepted, with the IDF claiming they hit an open area with no casualties.

2 rockets were ...

Oil Prices

OIL MARKETS REACT SHARPLY TO ESCALATING MIDDLE EAST TENSIONS

📈 WTI CRUDE IS NOW FORECAST TO HIT $94.10 BY YEAR-END, UP OVER $21 IN A WEEK, ACCORDING TO KALSHI MARKETS.

THE JUMP FOLLOWS IRAN’S CANCELLATION OF NUCLEAR TALKS WITH THE U.S., CITING ISRAELI AIRSTRIKES. WITH TENSIONS RISING, MARKETS ARE PRICING IN THE RISK OF REGIONAL ESCALATION AND POTENTIAL DISRUPTION TO OIL FLOWS THROUGH THE STRAIT OF HORMUZ, A KEY ROUTE FOR 20% OF GLOBAL OIL.

ANALYSTS WARN THAT A FULL CLOSURE OF THE STRAIT COULD PUSH PRICES ABOVE $120–$150 PER BARREL. ...

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