Iran Retaliates, Strikes Israeli Cities
Iran has launched a major wave of retaliatory attacks on Israeli cities, forcing millions of civilians to seek shelter. The direct confrontation follows last week's assassination of Iran's Supreme Leader. Meanwhile, Israeli strikes are reportedly hitting targets in Tehran, with one airstrike damaging a hospital and apartment blocks.
This direct confrontation follows years of a "shadow war" between Iran and Israel, characterized by indirect attacks through proxy forces, assassinations of nuclear scientists, and cyber warfare. The conflict escalated to direct military exchanges for the first time in 2024 and included a 12-day war in June 2025 after Israel struck Iranian nuclear and military facilities. Global oil prices have surged in response to the latest attacks. Brent crude, the international benchmark, jumped by 8% to around $79 a barrel, while West Texas Intermediate (WTI) also saw an 8% increase to about $72 a barrel. The escalation has raised fears of significant disruptions to global energy supplies, as approximately 20% of the world's oil passes through the Strait of Hormuz, which is now a contested zone. The attacks have sent shockwaves through global financial markets. In the United States, stock futures for the S&P 500 and Dow Jones Industrial Average fell by over 1%. European markets also saw declines, with France's CAC 40 and Germany's DAX both dropping by nearly 2%. Conversely, shares of defense companies like Lockheed Martin and BAE Systems saw significant gains. International leaders have reacted with alarm, urging de-escalation. An emergency meeting of the UN Security Council was convened, where UN Secretary-General António Guterres condemned the strikes and called for a return to negotiations. The United States defended the strikes as lawful actions to prevent Iran from obtaining a nuclear weapon, while Russia and China condemned the military action and called for an immediate ceasefire. Israel possesses a sophisticated multi-layered air defense system, including the short-range Iron Dome, the mid-range David's Sling, and the long-range Arrow-2 and Arrow-3 systems, designed to intercept a wide array of aerial threats from short-range rockets to ballistic missiles. This network is further enhanced by the new "Iron Beam" laser-based system, which became operational in late 2025. Iran's military strategy heavily relies on its large and diverse ballistic missile arsenal, considered the most significant in the Middle East. It is estimated to have around 2,500 ballistic missiles, including medium-range systems like the Shahab-3 and Sejjil, capable of reaching Israel. Following the 2025 war, Iran has been working to rebuild its missile production capabilities. The economic fallout extends to maritime trade, with marine insurers canceling war risk coverage for vessels in the Strait of Hormuz. This has led to a de facto closure of the critical waterway for most global shipping, with at least 150 tankers anchored and waiting. The cost of shipping oil from the Middle East to Asia, already at six-year highs, is expected to rise further. This round of attacks is part of a significant escalation that began on February 28, 2026, with joint U.S. and Israeli strikes on Iran targeting military and nuclear capabilities. The stated aim of the U.S. operation, codenamed "Operation Epic Fury," is to dismantle Iran's security apparatus. In retaliation, Iran has launched missiles at targets in Israel and U.S. bases in several Gulf countries, including the UAE, Bahrain, and Qatar.
