Tehran Enters Seventh Day Under Bombardment as Oil Nears $93
US-Israeli strikes have killed over 1,300 Iranians including Supreme Leader Khamenei, triggering regional counterattacks and the sharpest oil price surge in years.
Seven days into coordinated US-Israeli military operations against Iran, at least 1,332 people have been killed and Tehran remains under sustained aerial bombardment, with Brent crude hitting $90 per barrel for the first time in almost two years as the Strait of Hormuz remains effectively closed to commercial shipping.
Joint US-Israeli attacks on Iran have killed Ayatollah Ali Khamenei, the country’s supreme leader for nearly four decades, in strikes that began February 28 targeting the Iranian regime’s leadership, nuclear facilities, and military infrastructure. The operation, codenamed Epic Fury by the US and Roaring Lion by Israel, has drawn Iran into a multi-front conflict with Iran’s Islamic Revolutionary Guard Corps launching attacks on at least 27 bases in the Middle East where US troops are deployed.
Escalation Timeline: From Diplomacy to Strikes
The military action followed the collapse of nuclear negotiations mediated by Oman in Geneva just hours before strikes commenced. Oman’s Foreign Minister Badr Al-Busaidi said a ‘breakthrough’ had been reached and Iran had agreed both to never stockpile enriched uranium and to full verification by the International Atomic Energy Agency, with peace described as “within reach.”
According to the White House, Iran rejected a proposal for a civilian nuclear program with American investment in exchange for dismantling its nuclear program. US Middle East envoy Steve Witkoff blamed Iran for trying to “strong-arm” the negotiating team, citing Iranian insistence on maintaining uranium enrichment capabilities as a deal-breaker.
President Trump justified the operation by claiming Iran posed threats to “core national security interests,” stating the US “can’t take it anymore” regarding Iran’s nuclear ambitions. Trump accused Iran of rejecting ‘every opportunity to renounce their nuclear ambitions’, though an unspecified Pentagon source told Congress in closed-door briefings that there was no intelligence suggesting Iran was planning to attack US forces first.
Civilian Toll and Infrastructure Damage
The heaviest casualties have come from strikes on civilian areas. The strike hit the Shajareh Tayyebeh School in Minab, a city in the Hormozgan province of southern Iran, on Saturday morning, killing at least 165 schoolgirls and staff in the war’s deadliest single incident. Of the more than 1,300 people killed in the strikes on Iran so far, at least 181 are children, UNICEF said on Friday.
Iran’s Ministry of Foreign Affairs claimed on Thursday that the US and Israeli strikes have targeted 33 civilian locations nationwide, including hospitals, schools, residential areas, the Tehran Grand Bazaar, and the historic Golestan Palace complex. According to Al Jazeera, the Azadi Stadium, Iran’s largest sports complex, was also bombed as attacks intensified on Thursday.
Azadi Tower and the adjacent Azadi Stadium complex are located in western Tehran and hold deep symbolic significance as monuments to the 1979 Islamic Revolution. The area has been targeted in previous protests and is a strategic location for both military operations and regime legitimacy. Video footage from March 3 showed the landmark tower surrounded by smoke and flames as strikes hit nearby government and military installations.
The Iranian Red Crescent chief said that at least 3,090 homes, 528 commercial centres, 13 medical facilities and nine Red Crescent centres have been hit in Israeli-US strikes. The World Health Organization has verified more than 10 attacks on Iran’s health infrastructure during the US-Israeli campaign, resulting in four healthcare worker deaths and 25 injuries.
Regional Spillover and US Casualties
Iran’s retaliation has drawn multiple countries into the conflict. The Islamic Republic of Iran launched 189 ballistic missiles, 941 drone attacks and 3 cruise missiles against the United Arab Emirates by 4 March, while Qatar’s defence ministry said on Thursday that the country was targeted by several attacks including 14 ballistic missiles and four drones coming from Iran.
At least five of the six U.S. service members, all of them Army reservists, died when a drone struck a port in Kuwait on Sunday, according to a report from NBC News. Trump has said his administration expects the conflict to go on for ‘four to five weeks, but we have capability to go far longer than that’.
- US Central Command reports 86% reduction in Iranian ballistic missile launches since February 28
- Israel claims destruction of 80% of Iran’s air defenses and 60% of missile launch capability
- Israeli F-35I recorded first-ever air-to-air kill of manned aircraft, downing Iranian Yak-130 over Tehran
- Iran fired over 500 ballistic missiles and 2,000 drones since war began, 60% aimed at US regional targets
- Traffic through Strait of Hormuz down 80% as IRGC warns vessels of missile and drone risk
Israel has expanded operations into Lebanon, with the Israeli military saying its forces were now operating on the ground in neighboring Lebanon, where they would ‘advance and seize additional’ territory. Lebanese officials report at least 31 killed in Israeli airstrikes targeting Hezbollah positions.
Energy Markets Under Severe Stress
Oil Markets are experiencing their sharpest weekly rally on record. TheStreet reported that Brent Crude is up 8.8% today on the heels of the conflict in Iran, sitting at $92.93, up from yesterday’s settlement price of $85.41, marking the highest level since 2022.
Roughly a fifth of the world’s oil typically sails through the narrow waterway off Iran’s coast — the Strait of Hormuz — which remains effectively closed. The Strait of Hormuz remains closed, halting most energy shipments from the Persian Gulf, according to Barchart.
Qatar’s energy minister warned that oil could double to more than $150, dragging down global economies if the conflict persists for weeks. Traffic through the Strait of Hormuz has dropped by around 80 percent as of March 1, while Saudi Arabia’s Aramco closed its major Ras Tanura refinery after a suspected Iranian drone strike.
| Date | Brent ($/bbl) | Event |
|---|---|---|
| Feb 27 | ~$70 | Final Geneva talks conclude |
| Feb 28 | $74 | Strikes begin; Khamenei killed |
| Mar 3 | $82 | Strait of Hormuz effectively closed |
| Mar 6 | $93 | Largest one-week oil price surge ever recorded |
Financial Contagion Spreads
Equity markets are pricing in stagflation risk. The S&P 500 dropped 1 per cent after a report showed U.S. employers cut more jobs last month than they created and after oil prices jumped to their highest level in nearly two years, according to BNN Bloomberg.
The Cboe Volatility Index is up 16%, exploding to four-month highs and eclipsing 28. The Russell 2000 is off nearly two percent at the start of trading amid worries that the Iran invasion and higher oil prices might derail the Fed’s progress on inflation, and thus, force the central bank to punt on interest rates cuts.
Energy equities are the sole bright spot: Exxon Mobil and Chevron each gained more than 1%, while Occidental Petroleum climbed 3.3%. Transportation and high-fuel-cost sectors are collapsing, with Old Dominion Freight Line down 8.2%, Norwegian Cruise Line down 5.1%, and Southwest Airlines losing 6.9%.
“You can’t sugarcoat this report. A negative payrolls number combined with a big jump in oil prices will have traders worrying about stagflation risks.”
— Brian Jacobsen, Chief Economic Strategist, Annex Wealth Management
Leadership Vacuum in Tehran
On 28 February 2026, Ali Khamenei, the supreme leader of Iran, was assassinated. On 2 March 2026, Khamenei’s wife Mansoureh Khojasteh Bagherzadeh was confirmed to have also died of injuries sustained in the strike. Iran quickly formed a temporary leadership council, though Iran’s Foreign Ministry stated the military has lost control over several units, that are operating according to old general instructions.
Other confirmed high-value kills include defence minister Aziz Nasirzadeh and IRGC commander Mohammad Pakpour, along with chief of staff Abdolrahim Mousavi. CBS News reported that 40 Iranian officials had been killed in the strikes in the opening hours of the operation.
What to Watch
Three variables will determine whether this conflict escalates into a prolonged regional war or stabilizes in coming weeks:
Strait of Hormuz closure duration: Every additional week adds $10-15 to the oil price floor. If closure extends beyond mid-March, expect $100+ crude and central banks forced to choose between inflation and recession.
US ground force deployment: Trump has dismissed ground invasion as a “waste of time” but Defense Secretary Pete Hegseth warned the bombardment is “about to surge dramatically.” Watch for activation of additional Army reserve units beyond the 103rd Sustainment Command already deployed.
Iranian succession process: The Assembly of Experts has 60-90 days to select a new Supreme Leader. CIA assessments suggested that a hardliner from the IRGC would replace Khamenei. If hardliners consolidate power quickly, expect acceleration of nuclear program reconstitution. If succession fractures, internal instability could either limit Iran’s ability to sustain counterstrikes or trigger more aggressive retaliation to project strength.
Oil derivative markets are now pricing $110 Brent by month-end if current strike tempo continues. Fixed income is rotating to duration as recession fears mount. Gold hit $4,742 on safe-haven flows. The next 72 hours will likely determine whether this remains a contained operation or metastasizes into the largest Middle East conflict since the Gulf War.