Global oil prices reached their highest level since 2022, crossing the $100 per barrel threshold as a conflict between Israel and Iran evolved into what can only be described as regional energy warfare. Both sides were deliberately targeting fuel storage, distribution, and refining infrastructure, with devastating consequences for markets and civilians alike.
Israeli forces struck oil storage facilities in and around Tehran, killing four workers and blanketing the capital in black smoke. Iran’s Revolutionary Guards threatened to escalate further, warning Gulf states that their energy infrastructure would become targets if they continued to facilitate attacks on Iran. The threat was not idle: Iran had already struck Saudi Arabia, the UAE, Qatar, Bahrain, and Kuwait.
Saudi forces intercepted 15 drones, a Bahraini desalination plant was damaged, and two civilians died in a residential strike in Saudi Arabia. A US service member succumbed to wounds from an Iranian attack in the kingdom, the seventh American death in the conflict. Reports of Russian intelligence assistance to Iran raised alarming questions about the war’s expanding geopolitical dimensions.
Iran’s clerical body named Mojtaba Khamenei as supreme leader, the first hereditary transfer of the position in the Islamic Republic’s history. His appointment was seen as a consolidation of hardline authority at a moment when flexibility and diplomatic outreach were desperately needed.
The United States pledged not to target Iranian oil infrastructure and predicted only short-term supply disruptions. But with both sides showing increasing willingness to strike energy assets and no ceasefire on the horizon, the market was pricing in a prolonged period of elevated prices — and the global economy was beginning to feel the weight of that calculation.