Market Overview

Iran Shoots Down US Drone In What Trump Calls 'Very Big Mistake'; Pelosi Says 'No Appetite' For War

Iran Shoots Down US Drone In What Trump Calls 'Very Big Mistake'; Pelosi Says 'No Appetite' For War

Iran shot down a U.S. surveillance drone Thursday, escalating tensions in an adversarial relationship already on edge after Washington pulled out of a nuclear deal between the two countries. 

What Happened

Iran’s Revolutionary Guard said Iranian forces shot down the unmanned drone, and the U.S. confirmed it, but the two countries disagree on where the incident took place and whether the drone was in or had been in Iranian airspace.

The Guard said it shot down the drone in Iranian airspace over the coastal province of Hormozgan using a truck-based missile system, according to Iran’s Fars news agency.

U.S. Central Command confirmed that the drone, a U.S. Navy Broad Area Maritime Surveillance (or BAMS-D) aircraft, was shot down by an Iranian surface-to-air missile system on Wednesday evening Eastern time, or early Thursday in Iran. But the U.S. said the drone was in international airspace over the Strait of Hormuz.

“Iranian reports that the aircraft was over Iran are false,” Navy Capt. Bill Urban, a spokesman for the U.S. Central Command, said in a statement. “This was an unprovoked attack on a U.S. surveillance asset in international airspace. "

President Donald Trump responded on Twitter.

Why It’s Important

The Strait of Hormuz, the entrance and exit to the Persian Gulf, is of paramount importance to the United States because 20% of the world’s oil passes through the waterway. 

President Donald Trump decided last year to scrap a 2015 deal with Tehran to curtail Iran’s nuclear development and begin re-integrating it into the world’s trade network after years of sanctions and isolation.

The American withdrawal from the nuclear deal came over objections from U.S. allies in Europe, as well as China and Russia. Iran responded by saying it will no longer comply with the deal’s requirement that it limit stockpiling of enriched uranium, which can be used in weapons.

Last week, the U.S. blamed Iran for an attack on two oil tankers near the Gulf of Oman. Neither ship was American-operated, and Tehran denied involvement. The U.S. also said Iran fired at a drone that was responding to the oil tanker attack.

The U.S. has sent an aircraft carrier task force to the region and is reportedly considering sending as many as 6,000 more ground troops to the region.

What’s Next

Revolutionary Guard commander Gen. Hossein Salami went on Iranian TV Thursday and said the country doesn’t intend to go for war, but is ready to do so. 

U.S. Secretary of State Mike Pompeo said this past weekend on CBS’ "Face the Nation" — before the drone was shot down — that the U.S. was already “considering a full range of options” for dealing with a perceived aggressiveness from Iran.

Speaker of the House Nancy Pelosi spoke to reporters Thursday before an 11 a.m. briefing on the Iranian situation. 

"I think it's a dangerous situation and the high-tension wires are up in the region. We have to be strong and strategic about how we protect our interests. We also cannot be reckless in what we do," the top-ranking Democrat said. 

"I don't think the president wants to go to war. There's no appetite for going to war in our country." 

Oil prices spiked after the news of the drone incident. Brent crude, the international benchmark, was up 3.79% at $64.16 at the time of publication Thursday. 

The United States Oil Fund LP (NYSE: USO) was trading higher by 4.28% at $11.82.

Related Links: 

Oil Spikes As US Threatens To 'Zero' Out Iranian Oil Exports: What You Need to Know

Oil Prices Moving Following Reports Of Tanker Attacks Near Iran


Related Articles (SPY + USO)

View Comments and Join the Discussion!

Posted-In: News Futures Commodities Politics Global Top Stories Markets General Best of Benzinga