Oil Hits Century Mark as Iran’s New Leader Inherits a Nation at War

Iran awoke to two simultaneous crises over the weekend: a new supreme leader and a war that was rapidly spiraling out of control. As Mojtaba Khamenei was named his father’s successor, global oil prices crossed $100 per barrel, driven by Israeli strikes on Iranian energy infrastructure and Iranian retaliation against Gulf states.
Israeli forces struck four oil storage facilities in and around Tehran, killing four workers and sending columns of black smoke rising over the capital. The city of Karaj was also hit, with explosions heard across the surrounding area. Iran’s Revolutionary Guards responded by threatening retaliatory strikes on Gulf energy infrastructure unless the attacks were halted.
The threat was already being realized. Saudi Arabia, the UAE, Qatar, Bahrain, and Kuwait all reported Iranian strikes over the weekend. Saudi forces intercepted 15 drones, a desalination plant in Bahrain was damaged, and two civilians were killed in a Saudi residential neighborhood. A US service member also died from wounds sustained in an Iranian attack, the seventh American fatality of the conflict.
Iran’s president had earlier sought to de-escalate tensions with Gulf neighbors, publicly apologizing and suggesting strikes against them would stop. But within hours, the Iranian military resumed its campaign, revealing a deep fracture between the country’s civilian leadership and its armed forces that the new supreme leader would need to navigate immediately.
The United States pledged not to target Iranian oil infrastructure and expressed confidence that supply disruptions would be brief. However, with Iran producing roughly four percent of global oil — much of it destined for China — traders were unwilling to take Washington’s optimism at face value.