It is being reported that the Biden administration has worked back channels to talk to Iran to warn them about escalating the conflict in Israel, says Phil Flynn of PRICE Futures Group.

So far it doesn’t appear that Iran will listen. Iranian foreign minister Hossein Amir-Abdollahian is threatening that, “Iran will not remain an observer in this situation and has informed Israel video its allies: if its crimes continue in Gaza tomorrow it will be too late.

Reuters reports that “Hopes for a brief ceasefire in southern Gaza to allow foreign passport holders to leave the besieged Palestinian enclave and aid to be brought in were dashed, with Israeli bombardments intensifying ahead of an expected ground invasion.”

This comes as more fingers are pointed at Iran, the biggest state sponsor of terror, having a direct role in the horror in Israel. The Wall Street Journal is reporting that “Israel accused Iran of instructing Lebanese militant group Hezbollah to conduct recent attacks on Israel’s northern border to distract from the situation further south, where Israel is preparing for a ground operation in Gaza. The Wall Street Journal says, “Brig. Gen. Daniel Hagari warned Iran-backed Hezbollah forces in southern Lebanon that they would face deadly consequences if they continued to attack Israel Defense Forces. “The IDF is strongly prepared, we have reinforced troops and are responding to any actions,” he said during a press conference Monday.”

Now comes word that the US and Israel are discussing plans for a potential Joe Biden visit to Israel. This comes after a group of GOP senators already have planned to visit Saudi Arabia and Israel. The Biden administration is facing a lot of criticism for the way they have handled foreign relations with Iran.

Yesterday on Fox News Sunday, Shannon Bream interviewed John F. Kirby the Assistant to the Secretary of Defense for Public Affairs who seemed desperate to convince Americans the Biden administration has been tough on Iran. Shannon Bream asked him about the Wall Street Journal article that showed that Iran had direct involvement in planning the Hamas attack. He shot back, “Well, of course, Iran is broadly complicit here. And of course, the resourcing and training they’ve given to Hamas has helped Hamas function and be able to conduct the terrorist attacks that they have been able to conduct. We have held Iran accountable. There have, the attacks on our troops in Iraq and Syria have greatly decreased because of our retaliatory strikes. There’s the longest truce in Yemen now in place, saving tens of thousands of Yemeni lives. We have added military capabilities into the Gulf region, additional ships, a different aircraft. Now we’re bolstering our military presence in the Eastern Med. There should be no anybody mistaking the fact that we haven’t held, continue to hold Iran accountable.

Ms. Bream also asked, “So why make it any easier for them?”. Kirby shot back, “We haven’t made it easier, Shannon. We have in this administration alone, just in the two and a half years the president’s been in office, 400 entities sanctioned for a range of reasons, 30, 30 additional sanction regimes, and 300 entities just in the last year alone. And again, we’ve increased our military presence. This idea that we’re just somehow turning a blind eye, whistling past the graveyard as Iran supports terrorist networks is just not true.”

Yes, Iran’s oil production is at a five-year high along with their exports. They have reaped billions of dollars and their economy is in much better shape than it was years ago. The Trump administration had Iran boxed in, militarily, geopolitically, and economically and the Biden team let them off the hook. So desperate to get back into the JCPOA they allowed Iran to make billions, spread their reign of terror, and destabilize the Middle East.

After the big up day on Friday, the market is waiting for the next shoe to drop. Technically the market is back in a clear uptrend, reversing the downtrend pressure that was created after the crash from $95 back down to $82. People are still very nervous as we’ve said before, up until now the impact on supply has been zero. There is growing pressure to shut down Iran’s oil revenue.

We expect to see some extreme volatility in oil and products over the next couple of days. Not only is the November crude oil contract going off the board but there is also the most significant risk to global oil supplies since the Arab oil embargo. To say that there is a significant risk of an upside price spike is an understatement. With global inventories as tight as they are and the risk to supply as high as it is, use breaks to put on hedges. And while they are more expensive than they were just days ago, the possibility is they’ll be a lot more expensive later this week.

Reuters is reporting that China’s imports of major commodities remained resilient in September and painted a different picture to the market narrative that the world’s second-largest economy is struggling for momentum. Imports of crude oil, natural gas, and iron ore dropped slightly from August but were all higher than in September of last year. The first nine months of the year show strong growth over the same. In 2022 crude oil imports were up by 14.6%, natural gas up by 8.2%, coal by 73.1%, and iron ore by 6.7% according to customs data released on Friday.

Natural gas is taking a back seat to the action. After hitting key resistance, the market is pulling back. It’s the fundamentals in the short term look a little bearish.

Learn more about Phil Flynn by visiting Price Futures Group.