Key things to know about the US-Israel conflict with Tehran

By Bloomberg News

The U.S. and Israel launched coordinated, massive missile attacks on Iran that killed Supreme Leader Ayatollah Ali Khamenei. The strikes targeted the country’s military and were intended to prevent it from developing a nuclear weapon.

Iran countered with missile strikes at targets across the Mideast. The market impacts, particularly on oil, remain unclear, but some digital assets rallied on the tumult. Here is the latest as of 7 a.m. New York time:

Khamenei & succession

President Donald Trump said in a social media post that Khamenei, only the second supreme leader of Iran since the Islamic Republic’s founding in 1979, was killed. Trump called Khamenei “one of the most evil people in History” and reiterated his call for the Iranian people to rise up and overthrow the regime.

Iranian state media initially rejected Trump’s claims but at around 5 a.m. in Tehran, official TV confirmed the supreme leader’s death, saying he was killed in his office compound. Authorities declared 40 days of national mourning.

The killing of Khamenei raises the question of who will rule Iran next, as he had not publicly designated a successor. The Assembly of Experts is the clerical body responsible for selecting the supreme leader.

In the interim period, a council comprising the president, the head of the judiciary and a jurist from the Guardian Council will assume leadership duties. Ali Larijani, chief of Iran’s Supreme National Security Council, said a temporary leadership council will meet Sunday.

Targets

U.S. Central Command said the military had targeted Iran’s Islamic Revolutionary Guard Corps command and control facilities, air defense capabilities, missile and drone launch sites and military airfields. For the first time, the U.S. used low-cost one-way attack drones in combat, according to the Centcom post on X.

Trump said the bombing of Iran will continue through the week.

Iran state television reported on Saturday that 201 people had been killed and 747 injured in the strikes, citing the Red Crescent. Some 85 people were killed by a missile that hit a primary girls’ school in Hormozgan province, the semi-official Iranian Students’ News Agency reported.

Islamic Revolutionary Guard Corps Commander Mohammad Pakpour and Defense Minister Aziz Nasirzadeh were among other top officials killed in the strikes.

Widespread retaliation

Iran lobbed a wave of missile and drone attacks aimed at U.S. bases and allies around the region, including in the United Arab Emirates, Qatar, Kuwait and Saudi Arabia. Officials put up a show of defiance, with Larijani vowing that attacks on Sunday would be stronger than the day before. Even Oman, which was previously mostly unscathed, came under fire on Sunday.

Defense systems were fighting off missiles and drones from Dubai’s glitzy skyscrapers and wealthy enclaves, where residents reported hearing more blasts Sunday. CENTCOM confirmed some “minimal” damage to U.S. installations. Israel was also targeted.

In a sign of Iran’s growing isolation, countries across the Gulf are stepping up their criticism of Tehran’s strikes. While Sunni Arab states in the Gulf have long had tense relations with the Shia-majority Iran, in recent years the likes of Saudi Arabia and the UAE had sought to improve relations. The current crisis looks to deal a setback to those efforts.

Oil

Oil markets are pricing in a “widening escalation cycle” pushing Brent crude toward $80 a barrel after U.S. strikes on Iran, according to a Bloomberg Intelligence analysis. OPEC+ on Sunday agreed in principle to a slightly larger increase in oil production next month, delegates said, as the conflict threatened to bolster a rally in crude prices.

Oil and gas shipping remains largely paused in the Strait of Hormuz, as Iran cranks up threats to vessels transiting through the chokepoint. Mohsen Rezaei, a member of the Expediency Discernment Council that advises Iran’s supreme leader, said on state TV that “no American ship is allowed to enter the Persian Gulf.” Earlier, the U.S. warned ships to stay away from the Persian Gulf and Arabian Sea, specifically 30 nautical miles from American military assets.

A small oil tanker, which appears to be sanctioned by the U.S. for helping Iran export fuels, was targeted off Oman’s northern coast, though it was unclear who was behind the attack.

Travel disruptions

Airlines across the Persian Gulf extended their suspension of operations as retaliatory strikes from Iran enter a second day, causing major disruptions at some of the world’s busiest airports. Emirates, the world’s largest international airline, suspended flight movements indefinitely, while Etihad Airways extended cancellations until 2 am on Monday. Qatar Airways said all flights are still halted and that it would provide an update 9 am on Monday.

Several airports in the Gulf were hit in the crossfire, with Abu Dhabi Airport reporting that one person died and several were injured overnight after the emirate intercepted an Iranian drone. The main airports of Dubai, Bahrain and Kuwait were also struck

Impact on Markets

All eyes will be on energy markets when trading fully reopens on Monday, macro traders said, with early indications of volatility also expected when the U.S. dollar and other currencies start to trade in Australia.

Already, the threat of military action had driven the price of oil up last week. Brent crude increased 2.5% to $72.48 per barrel on Friday, the highest closing price since July. It’s gained almost 20% this year.

Bitcoin meanwhile staged a tepid recovery. Prices rose as much as 2.2% to $68,196 after Iran confirmed the death of Khamenei, before falling back to about $66,500 at 6 a.m. in New York.

U.S. politics

In an eight-minute video released in the immediate aftermath of the attack, Trump sought to make his case for the assault on Iran, framing it as necessary to eliminate an adversary that he said had spread terror far from its borders and murdered its own people, most recently in protests that roiled the country.

He urged the Iranian people to rise up against the theocracy that has governed the country since 1979, saying the government was “yours to take.” Apart from a handful of posts to his social media platform, the president has otherwise largely stayed out of public view since the conflict began.

So far, congressional reaction is falling mostly along party lines, with a few exceptions. Republicans are largely expressing support for the military action and Democrats calling for a vote on a resolution that would curtail the president’s authority to conduct strikes.

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(With assistance from María Paula Mijares Torres, Angela Cullen and Stanley James.)

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