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A U.S. Air Force Special Tactics combat controller with the 23rd Special Tactics Squadron maintains visuals on an Ohio Air National Guard 127th Airlift Wing  C-130H Hercules during an airfield reconn mission during Exercise Eager Lion, May 16, 2017, in Jordan.

A U.S. Air Force Special Tactics combat controller with the 23rd Special Tactics Squadron maintains visuals on an Ohio Air National Guard 127th Airlift Wing C-130H Hercules during an airfield reconn mission during Exercise Eager Lion, May 16, 2017, in Jordan. (Ryan Conroy/U.S. Air Force)

Iran sought to distance itself from a deadly attack on a U.S. base in Jordan by Tehran-backed militants, as President Joe Biden faced mounting pressure to respond fiercely against the Islamic Republic.

“Resistance groups in the region do not take orders from the Islamic Republic of Iran,” Foreign Ministry Spokesman Nasser Kanaani said on Monday. He was referring to what’s often called the “axis of resistance” — a network of militias in territories from Yemen to Iraq and Gaza that are funded by Tehran and share its opposition to the US and Israel.

Accusations that Iran was involved in the weekend drone assault that killed three American soldiers and wounded dozens are “baseless,” he said.

The troops were the first Americans to die from a Middle East attack since regional tensions were inflamed by the start of the Israel-Hamas war in Gaza last October.

While the U.S. did not directly blame Iran, Biden said the White House knew it “was carried out by radical Iran-backed militant groups operating in Syria and Iraq.”

“We will hold all those responsible to account at a time and in a manner of our choosing,” he said.

Oil initially rose 1.5% on Monday, with Brent climbing above $84 a barrel, though it later pared almost all those gains. Iran’s currency, the rial, fell to its weakest level on the black market since the start of the Israel-Hamas war, according to Bonbast.com, a website that tracks the exchange rate.

U.S. response

Washington’s response will be stronger than its most recent retaliations against Iranian proxies, according to a person familiar with the U.S. position, underlining the risks of further escalation in a conflict that’s already spread from Gaza across the Middle East.

Some American lawmakers, including Sen. Lindsey Graham, a Republican, are urging Biden to strike Iranian territory.

“Hit Iran now,” Graham, who’s long been hawkish on Iran, said. “Hit them hard.”

The challenge for Biden is how to retaliate without raising oil prices and without getting drawn further into the conflict — and especially into a direct confrontation with Iran — in an election year.

Higher crude prices would likely sting American consumers by pushing up the cost of gasoline, a politically sensitive topic.

The U.S. has already become more embroiled in the Middle East since Oct. 7. It sent more naval and air forces to the region to support Israel and deter attacks on it from the likes of Hezbollah, which is based in Lebanon. This month, it’s launched several missile strikes on Yemen to try to stop attacks on commercial and military ships by the Houthis, a group funded and trained by Iran.

“The U.S. faces bad options only,” said Firas Modad, head of Modad Geopolitics, a risk-advisory firm. Biden’s under “immense pressure” to respond to the deaths in Jordan but a direct conflict with Iran would likely result in higher energy prices and significant casualties, he said.

Less provocative

The U.S. hasn’t struck Iran’s territory for decades and it may opt for a less provocative move such as hitting Iranian targets abroad or those of its proxies in countries such as Syria or Iraq.

In 2020, under then-President Donald Trump, the U.S. assassinated Iranian general Qassem Soleimani in Iraq, saying he was responsible for planning attacks on Americans through Tehran’s proxies. Iran responded by striking U.S. bases in Iraq, injuring many troops but not killing any. Tensions between Washington and Tehran eased after that.

“The U.S. will retaliate — that much is clear,” said Ziad Daoud, chief emerging markets economist for Bloomberg Economics. “The question is whether Iran will absorb the hit, or react to the retaliation. At stake is higher oil prices and potential global recession.”

Tehran has repeatedly said it doesn’t want the Israel-Hamas conflict to spread, though it’s warned of that happening as long as fighting in Gaza continues. Hamas, designated a terrorist organization by the U.S., is part of the axis of resistance and Iran has said the blame for any regional escalation lies with Israel and the U.S.

Iran won’t interfere with how the groups it backs choose to support Palestinians in Gaza or defend themselves, the Foreign Ministry said on Monday.

Tehran faces its own balancing act in terms of how much support it gives allies. It’s open about backing militias across the region like Hezbollah in Lebanon and the Houthis in Yemen, who’ve roiled the shipping world with their attacks in the Red Sea. But it has always rejected the characterization of proxies acting under its command.

Weekend strike

Islamic Resistance in Iraq, a group aligned with Iran, said on Sunday it used drones to target four bases including Al-Tanf in Syria, which houses U.S. troops. It did not say it had attacked Tower 22 in Jordan, which is where the deaths over the weekend took place.

Tower 22 is a garrison in north-east Jordan close to the borders of Iraq and Syria. It has about 350 American troops.

IRI is one of several groups that have repeatedly targeted U.S. forces since Oct. 7, the day Hamas attacked southern Israel and triggered the war in Gaza. The U.S. has retaliated with its own missile strikes in Iraq and Syria.

The Syrian Observatory for Human Rights, a network of activists that track developments in the region, said Iran-backed groups had redeployed near the Syria-Iraq border in anticipation of a potential U.S. retaliation.

With assistance from Dana Khraiche and Arsalan Shahla.

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.

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