International oil markets lurched higher after Israeli forces struck fuel storage facilities in and around Tehran, triggering a dramatic spike in crude prices above $100 per barrel. The attacks, which killed four workers and engulfed the Iranian capital in black smoke, marked a significant new chapter in the ongoing conflict.
Iran’s Revolutionary Guards responded with fierce rhetoric, threatening that continued strikes on energy infrastructure would provoke retaliation against oil facilities in neighboring countries. The warning was taken seriously by markets, given Iran’s track record of targeting Gulf energy infrastructure in previous periods of regional tension.
Gulf states experienced the reality of those threats almost immediately. Saudi Arabia, the UAE, Bahrain, Qatar, and Kuwait all reported incoming drones and missiles over the weekend. Saudi forces intercepted 15 drones, while Bahrain suffered damage to a desalination plant. Two civilians were killed in a strike on a residential neighborhood in Al-Kharj, Saudi Arabia.
Washington attempted to contain the crisis, with the US energy secretary insisting that America would not target Iranian oil infrastructure and predicting only brief supply disruptions. However, analysts questioned whether these assurances would be sufficient to calm markets, given the speed at which the conflict was escalating.
Iran’s clerical establishment simultaneously announced the selection of Mojtaba Khamenei as the country’s new supreme leader, succeeding his late father in a historically unprecedented move. The appointment, which critics said transformed the Islamic Republic into a de facto dynasty, added a new layer of political uncertainty to an already volatile regional situation.
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