Iran War Throws Oil Into Crisis
The Iran conflict has pushed oil markets into their biggest crisis in decades, sending crude prices soaring to yearly highs. Gulf stock markets tumbled with Kuwait suspending trading altogether in response to regional instability. Wall Street suffered its sharpest monthly drop in a year as markets ended February under significant stress.
The current conflict erupted on February 28, 2026, with a joint US-Israeli military operation codenamed "Roaring Lion" by Israel and "Operation Epic Fury" by the United States. The stated objectives included toppling the Iranian regime, destroying its missile and military capabilities, and preventing the nation from obtaining nuclear weapons. This escalation follows a period of heightened tensions, including a direct 12-day war between Iran and Israel in June 2025, which also involved US airstrikes on Iranian nuclear facilities. Despite recent Omani-mediated nuclear negotiations in Geneva, the US had been amassing its largest military presence in the Middle East since the 2003 Iraq invasion. The initial wave of the assault involved extensive airstrikes on key military and governmental sites in cities including Tehran, Isfahan, Qom, and Karaj. In a significant development, the strikes resulted in the assassination of Iran's Supreme Leader, Ali Khamenei. In retaliation, Iran launched numerous drones and ballistic missiles at Israel and targeted US military bases across the Persian Gulf, including those in Bahrain, Iraq, Jordan, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates. There are also unconfirmed reports that Iran's Revolutionary Guards have announced the closure of the critical Strait of Hormuz shipping lane. The conflict is unfolding against a backdrop of significant domestic turmoil within Iran. Massive anti-government protests, the largest since the 1979 revolution, have been ongoing since late 2025, fueled by a severe economic crisis and the collapse of the national currency. US President Donald Trump has publicly called for the Iranian people to rise up against their government, stating the military operation's goal is to weaken Iran's security apparatus to empower the protest movement. This follows months of escalating rhetoric, including a statement in February that regime change would be "the best thing that could happen."
