Explaining the Israel and Iran Missile Exchange

Oil markets have largely discounted the Iranian missile and drone barrage directed at Israel because it was essentially a ruse designed not to inflict any damage, but to save face at home and abroad. Almost all of the missiles were intercepted by Israeli defense systems, yet Tehran was able to boast of its first direct attack on Israel.  What should be more worrisome for oil markets is Israel’s response to Iran’s response (to Israel’s response), which came around midnight on Thursday, when first reports of an explosion inside…