Attacks continued in the Middle East over the weekend with the area looking no closer to a resolution of the various issues that have flared but a region-wide conflict remains unlikely. On a positive note, Pakistan and Iran have restored diplomatic ties after the two countries attacked terrorist groups along their border. Soft fundamentals have outweighed the regional tensions, the area produces a third of the world’s oil, to result in crude range trading. Here is a recap of the latest developments.

• There was an airstrike on the Syrian capital Damascus which killed five “high-ranking” Iranian Revolutionary Guard members. Tehran is accusing Israel of the attack. Israel has attacked Iran-backed targets in Syria in the past, including as recently as December. Iran has said it will retaliate, which given its actions last week, should be taken seriously.
• Israel’s PM Netanyahu has rejected both a plan to have the remaining Israeli hostages held by Hamas released and US President Biden’s insistence on a two-state solution. Pressure to come to a deal on releasing the hostages is growing in Israel but the PM said the conditions are currently unacceptable. The US, Qatar and Egypt are working to achieve a resolution that would also end the war in Gaza.
• A US military base in Iraq was hit on Saturday causing some injuries. The Iran-supported Islamic Resistance of Iraq has claimed responsibility and has attacked the site before, according to the BBC.
• Shipping through the Strait of Bab el-Mandeb to the Suez Canal remains precarious. The US struck Houthi positions on the weekend in a move to stop a missile launch “aimed into the Gulf of Aden”. Around 28mn barrels of crude and products have so far been rerouted from the Red Sea, according to OB. The Iran-backed Houthis have said that they won’t attack Russian, Chinese, Saudi or UAE shipping, but warned against cooperating with the US.