A stark disconnect between Iran’s diplomatic signals and its military actions defined the most dramatic weekend of the Middle East conflict to date, leaving oil markets on edge and Gulf states at a loss. The country’s president apologized to Gulf neighbors and pledged to stop strikes against them — even as the military continued its barrages without pause.
The discord was set against a backdrop of Israeli strikes on oil storage facilities near Tehran, which killed four workers and left the capital shrouded in black smoke. Iran’s Revolutionary Guards threatened to push global oil to $200 per barrel if the attacks continued, a warning that helped drive crude above $100 on international markets.
Saudi Arabia, the UAE, Qatar, Bahrain, and Kuwait all confirmed Iranian attacks. Saudi forces intercepted 15 drones, Bahrain’s desalination plant was damaged, and two Saudi civilians were killed. A US service member died from injuries sustained in an Iranian strike, the seventh American killed in the conflict.
Iran’s clerical assembly compounded the confusion by appointing Mojtaba Khamenei as supreme leader, selecting the late leader’s son in a historically unprecedented move. The new leader’s hardline affiliations led analysts to question whether he would bring the military under control or allow it to operate with even greater freedom of action.
Washington’s assurances that supply disruptions would be temporary and that Iranian oil infrastructure would not be targeted provided some comfort to markets. But with Iran’s military and political leadership apparently pulling in different directions, and oil already above $100, investors were not convinced that stability was anywhere near at hand.