Israel’s recent strikes on Iranian oil infrastructure and the surge in global crude prices are underscoring a growing national security concern, the country’s dependence on centralized energy systems, Lt. Col. (res.) Ivri Verbin, a sustainability expert and CEO of Good Vision for Corporate Responsibility, told The Jerusalem Post on Monday.
While once conceived of as an issue for environmentalists, Verbin explained that states were now fighting for energy during conflict in a way they once did for food, water, and other essential resources.
A deregulated, decentralized energy system is inherently more resilient, he explained. When an entire sector depends on a single facility or energy source, it becomes vulnerable to a wide range of disruptions, from natural disasters to war or terror attacks.
“Once every small city has its own plan or facility, not only for renewable energy, it becomes far more difficult for a single strike to collapse the system,” he said.
The recent strikes are likely a deeply “symbolic” move as they didn’t target the production sites, only the oil storage facilities, Verbin explained.
IDF sources told The Post on Saturday that the oil depots struck were connected with the IRGC, thus distinguishing them as a military site.
As oil is Iran’s main export, and without a flourishing tourism industry, relief from sanctions or any other means to recover financially, Israel and the US were sending a message to Tehran.
Iran’s protests show deep economic vulnerabilities
The jab at Iran’s economic prospects comes only a month after Iran suppressed protests, killing and arresting thousands, which broke out in response to the country’s dire financial state. “So the effect is not strategic, it’s tactical. It creates a lot of environmental damage, and a lot of continuity, but mainly on the local side,” he continued.
The strikes “reduced the amount of energy and it’s damaged the continuity of the energy performance of the region or of the state [of Iran]. Of course, in the medium and long term, you may have larger and wider effects, because it will maybe influence what they will export because they will take the fuel that was burnt for themselves, and not to export it,” he explained.
The economic impacts will be widely felt, Verbin acknowledged, noting that the uncertainty would cause panic buyers to stock up. Europe’s overreliance on liquefied natural gas and imported oil, and the psychology of supply-and-demand in oil sales, led oil to surge more than 25% to nearly $120 a barrel. There are also fears this inflation could bleed into over sectors as transportation costs are anticipated to rise.
The strikes could backfire on Israel, Verbin acknowledged, noting that European interests in affordable energy may outweigh the need to overthrow the Islamic regime despite the national security threats the Islamist Middle Eastern power poses.
“This chaos in the financial markets is all about the Strait of Hormuz… This oil shock won’t end until ships can sail freely through the Strait,” Ed Yardeni of New York-based Yardeni Research told Reuters. “Until then, the financial markets are likely to become increasingly concerned about a 1970s-style stagflation scenario.”
While Israeli and US strikes on Iranian oil storage indicate that both Washington and Jerusalem are aware of the need to move from relying on oil, Verbin bemoaned the lack of movement in Israel toward a renewable energy structure.
While Energy and Infrastructure Minister Eli Cohen told the Knesset Economic Affairs Committee last year that Israel was on track to generate one-third of its electricity from renewable sources by 2030, Verbin said he doubted the country would even reach 20%. He estimated that only about 14% to 15% of Israel’s energy is currently produced from greener sources.
With most Israeli vehicles still relying on gasoline, Verbin insisted that to fortify the economy, civilian life, and national security, the government needs to find ways to push the use of electric vehicles.
“I think the government is not supporting [the shift to electric vehicles] enough, not through tax policy, not through infrastructure, and not in other areas,” he said. “The integration of electric vehicles can, of course, be cleaner, but it can also drive a broader transformation and greater stability in the energy market.”