On the first day in power for the 56-year-old son of slain leader Ali Khamenei, Iranian troops mustered a fresh wave of missile and drone attacks on Saudi Arabia, Bahrain, Qatar, the UAE and Israel.
Another missile was also fired at NATO member Turkey, the second such incident in five days, with the alliance’s air defences intercepting it before it could hit its target.
With the Strait of Hormuz off Iran blocked for almost all oil tankers, the price of benchmark crude oil contracts rocketed past US$100 a barrel on Monday – their highest levels since Russia’s invasion of Ukraine in 2022 – before edging back slightly.
French President Emmanuel Macron said that his country and its allies were working on a “purely defensive” mission to reopen the strait, through which nearly 20 per cent of the world’s crude oil usually transits.
The mission would be aimed at escorting ships “after the end of the hottest phase of the conflict”, but experts say it would mean putting navy vessels at risk of incoming fire from the nearby Iranian coast.
Kamal Kharazi, a foreign policy adviser to Iran’s supreme leader, told CNN that Tehran was calculating that “the economic pressure will be beefed up to the extent that other countries intervene” to end the war.
Benchmark oil prices are up 40-50 per cent since the US and Israel launched their attack on Iran on Feb 28, while stock markets around the world are down, hitting pension funds and savings.
Inflation caused by a sustained oil shock would also push up the price of goods for consumers everywhere.
Queues at petrol stations have been seen as far afield as Vietnam and the Philippines as drivers anticipate higher prices, while Hungary and Croatia in the EU announced fuel price caps.
RALLIES
Iran faced a fresh blitz of US and Israeli strikes after its Assembly of Experts, the top clerical body, appointed its first new supreme leader in 37 years.
Iranian state media carried images of tens of thousands of people celebrating Mojtaba Khamenei’s selection in central Tehran on Monday, many carrying his picture.
Iran’s rebel Houthis in Yemen and the Hezbollah armed group in Lebanon pledged allegiance, while Russian President Vladimir Putin on Monday promised “unwavering support”.
Unconfirmed US media reports over the weekend said that Moscow has been providing targeting intelligence to the Islamic Republic’s military.
Trump told the New York Post newspaper he was “not happy” about Khamenei’s appointment, while Israel’s foreign ministry called him a “tyrant”.
Ali Ansari, a professor of Iranian history at the University of St Andrews in Scotland, told AFP the new supreme leader was a hardliner who had “been involved in all the most violent repressions that have taken place over the last 15-16 years”.
Ali Vaez, of the International Crisis Group (ICG) think tank, said the appointment was intended to send a defiant message that Trump’s war “has only replaced one Khamenei with another”.