Iran’s Revolutionary Guards made one thing clear over the weekend: the country had no intention of surrendering its energy infrastructure without imposing maximum costs on anyone who threatened it. With oil already above $100 per barrel and threats of $200 on the table, markets were beginning to price in the possibility of a prolonged conflict with no clear endpoint.
Israeli strikes on oil storage and fuel distribution facilities near Tehran killed four workers and left the capital shrouded in black smoke. Iran’s Revolutionary Guards threatened to drive global oil to $200 per barrel, explicitly framing energy prices as a weapon to be deployed against Israel, the United States, and any Gulf state that facilitated attacks on Iranian infrastructure.
Saudi Arabia, the UAE, Qatar, Bahrain, and Kuwait all confirmed Iranian strikes. Saudi forces intercepted 15 drones, Bahrain’s desalination plant was hit, two Saudi civilians were killed, and a US service member died from wounds sustained in an Iranian attack — the seventh American fatality of the war.
Iran’s clerical body appointed Mojtaba Khamenei as supreme leader following his father’s death. His appointment was historic, divisive, and, in the view of most analysts, a sign that Iran would maintain its current military posture for the foreseeable future. Reports of Russian intelligence assistance to Iran in targeting US military assets added a layer of geopolitical complexity that made any near-term resolution even harder to envision.
Washington pledged not to strike Iranian oil infrastructure and predicted only brief disruptions. But with Iran vowing to defend its energy assets at any price and markets beginning to brace for a long conflict, the optimism from Washington was increasingly at odds with the reality being priced into every barrel of crude.