Iran's IRGC Vows to Repel US Incursion, Oil Eyes $120 Spike

Iran's Revolutionary Guard Corps has vowed to "immediately repel" any US ground incursion, deepening a conflict that has already lifted energy stocks 13 to 15 percent in a month.

Iran's Revolutionary Guard Corps said Monday its ground forces stand at maximum readiness to repel any US ground incursion, as continued airstrikes and retaliatory strikes keep crude risk premiums elevated.

"The IRGC Ground Forces, particularly the defense units, are at the highest level of readiness and will neutralize any hostile act or enemy infiltration at the very first moment," Brig. Gen. Rouhollah Nouri, deputy commander of the IRGC Ground Forces, said at a ceremony in Shahroud, according to the semi-official Tasnim news agency.

The statement came as explosions were reported early Monday across several Iranian provinces, including the first strike on the northwestern city of Tabriz since the US launched its latest attacks last week. The exchange of fire continues despite a Pakistan-brokered memorandum of understanding signed in June that was intended to end the war. Goldman Sachs forecasts Brent averaging around $80 a barrel in the fourth quarter, with potential spikes to $120 if maritime transport routes through the Strait of Hormuz are disrupted.

Energy majors have already priced in the escalation — Shell shares have gained 13 percent and BP 15 percent over the past month. The conflict is also rippling through consumer goods: Nivea-maker Beiersdorf said Monday it has been unable to deliver some products to Saudi Arabia and the United Arab Emirates because of the conflict, trimming its full-year outlook.

Strait of Hormuz Risk Premium Builds

The Strait of Hormuz handles roughly 21 percent of global oil trade, making any disruption a systemic risk for energy markets. While oil prices have not yet reached the levels Beiersdorf feared, CEO Vincent Warnery said sustained increases would eventually filter through to costs because the company uses large amounts of plastic packaging. "That's something which is impacting not only our cost, but also our consumption. So we hope that the war will finish soon in order to get back to normal business," Warnery said during a media call.

Nouri said the "continuous vigilance and permanent readiness of the armed forces guarantee Iran's sustainable security," with preparedness being pursued "across all operational sectors." The comments mark the latest escalation in rhetoric between Tehran and Washington since the US began conducting airstrikes against targets in Iran's southern regions.

Iran has responded with strikes targeting facilities and bases that Tehran says are used by the US military in several countries across the region. The June memorandum, brokered by Pakistan, was intended to establish a lasting peace settlement, but both sides have continued attacks. The IRGC's vow to repel any ground incursion suggests Tehran is preparing for a potential expansion of the conflict beyond the current air campaign.

A Conflict More Sustained Than 2020

The last time the US and Iran engaged in direct military exchanges was in January 2020, following the US drone strike that killed Qassem Soleimani. That episode saw Brent spike briefly above $70 before retreating within weeks. The current conflict has already proven more sustained, with hostilities continuing for over a month despite the June peace framework.

The geopolitical risk premium in crude has been building steadily. Goldman Sachs' $120 spike scenario assumes disruption to maritime transport routes — a plausible outcome if the conflict expands to the Strait of Hormuz. For equities, the conflict has been a tailwind for energy names but a headwind for consumer goods companies with Gulf exposure. Beiersdorf's warning that it cannot deliver to Saudi Arabia and the UAE highlights the real-economy costs of the conflict.

If the US-Iran conflict continues to escalate, expect further upward pressure on crude prices and continued disruption to Gulf supply chains. If the June memorandum can be revived, oil could retreat toward the $80 baseline Goldman Sachs projects for the fourth quarter. The next few weeks will be critical in determining which path the conflict takes.

This article is for informational purposes only and does not constitute investment advice.