Global oil markets moved into full crisis mode as Iran threatened to strike energy infrastructure across the Gulf, a warning that came just days after Israeli attacks on Iranian oil facilities pushed crude prices above $100 per barrel. Traders and analysts were united in their assessment: the situation was deteriorating faster than anyone had anticipated.
Israeli strikes on oil storage and fuel distribution sites near Tehran killed four workers and left the capital cloaked in black smoke. Iran’s Revolutionary Guards issued their starkest warning yet, telling Gulf states to pressure Israel and the United States to halt their campaign or face Iranian strikes on their own oil infrastructure.
Those threats were backed by action. Saudi Arabia, the UAE, Qatar, Bahrain, and Kuwait all reported Iranian attacks over the weekend. Saudi defenses intercepted 15 drones, Bahrain’s desalination plant was hit, and two Saudi civilians died in a residential strike. A US service member died from wounds sustained in an Iranian attack, the seventh American killed in the conflict.
Iran’s political leadership was simultaneously overhauled. The clerical assembly appointed Mojtaba Khamenei as supreme leader, selecting the son of the late Ali Khamenei in a move that critics argued transformed the Islamic Republic into a dynastic state. The new leader’s hardline reputation suggested little appetite for compromise.
Washington sought to steady markets, pledging not to target Iranian energy assets and predicting only brief supply disruptions. But with Iran threatening Gulf oil infrastructure, the conflict expanding to new countries, and no diplomatic framework in place, the market’s anxiety was entirely understandable.