Iran Ready for More Intense War and Won’t Relent, Official Says

(Bloomberg) -- Iran is ready for a more intense war and will escalate its counterstrikes if the US continues attacking its territory and infrastructure, according to a senior official from the Islamic Republic.

Tehran has no intention of backing down in the face of an American naval blockade and attacks on its oil tankers, said the official, who asked not to be identified discussing sensitive matters. Economic pain may be increasing, they said, but the country's leaders see the war with the US as posing an existential threat that leaves them little choice but to keep fighting.

Iran has been rebuilding its military capabilities since the most intense period of the war ended in April and has enough missiles for a lengthy conflict, the official added.

The comments come as hostilities between the US and Iran show little sign of easing, with the war now into its seventh month. Overnight, Washington said one of its warships had to evade an Iranian attack, and that it destroyed five of the Islamic Republic's energy tankers in response. Tehran then fired around 20 missiles at a Jordanian airbase used by the US and attacked more American navy ships, as well as several commercial vessels.

The tit-for-tat strikes have pushed up energy prices, with Brent crude climbing above $100 a barrel on Wednesday and extending its gain this year to around 65%. US diesel pump prices hit a record last week, adding to pressure on President Donald Trump to end a conflict that's unpopular with voters ahead of midterm elections on Nov. 3.

Many of Iran's leaders "believe the Trump administration responds only to threats and escalation," Dina Esfandiary of Bloomberg Economics wrote. "They also think the administration is more sensitive to an escalating war in the lead-up to the midterm elections."

This week, Iran's new security chief, Mohsen Rezaee, said its military posture toward US ships and bases had been "fundamentally recalibrated," signaling a more aggressive stance.

Mohammad Bagher Ghalibaf, the speaker of parliament and lead negotiator with the US in previous ceasefire talks, warned the era of "proportionate responses" was over.

The war, which erupted when the US and Israel began strikes on Iran in late February, has entered a stalemate of sorts, with both sides jockeying for control over the Strait of Hormuz. No official peace talks have been held for months and there's little sign of the sides returning to the negotiating table.