(Bloomberg) — Iran named the son of the late Ayatollah Ali Khamenei as its new supreme leader as Tehran kept up its attacks on several countries on the ninth day of the war in the Middle East.
Mojtaba Khamenei, 56, won a “decisive vote” in Iran’s Assembly of Experts, the semi-official Fars news agency said Sunday, but delayed announcing the choice for most of the day. Iran’s Islamic Revolutionary Guard Corps pledged full obedience to the new leader in a statement.
Arab states across the Persian Gulf continued to face incoming missiles and drones from Iran, which said it had the capacity to sustain the war for months. Israel struck fuel depots in Tehran and threatened the Islamic Republic’s power grid, sparking a warning from the Red Crescent about toxic acid rain.
Oil rose above $100 a barrel at the open and US stock futures fell. US equity-index futures fell at the open in Asia, while the dollar strengthened.
As the region braced for more strikes, the US State Department ordered the departure of US employees in Saudi Arabia, according to the New York Times, which cited anonymous officials. Previously, nonessential employees and family members at diplomatic outposts had been allowed to leave voluntarily, but an ordered departure suggests concerns about a heightened threat level.
President Donald Trump said the US will consider widening its strikes on the Islamic Republic in a conflict that’s upended energy markets and caused mass flight disruptions.
Trump is also weighing the option of deploying special forces on the ground to seize Iran’s near-bomb-grade uranium, as officials grow increasingly concerned the stockpile may have been moved, according to three diplomatic officials briefed on the matter.
“They haven’t been able to get to it and at some point, maybe we will,” Trump said late on Saturday during a briefing aboard Air Force One. “We haven’t gone after it, but it’s something we can do later on. We wouldn’t do it now.”
The United Arab Emirates, Kuwait, Saudi Arabia and Bahrain said they intercepted Iranian attacks over the weekend. Late Sunday, Kuwait said its air defenses intercepted three ballistic missiles and destroyed two drones, while two other drones targeted areas near Kuwait’s international airport, which caused fuel depots to explode.
The UAE and Kuwait began reducing oil production amid the near-closure of the crucial Strait of Hormuz, through which about a fifth of the world’s energy exports transit.
A water desalination plant in Bahrain sustained material damage following an Iranian drone attack, the country’s government said, adding that there was no impact on water supplies.
The Iranian strike on Bahrain came after Tehran accused the US of hitting one of its water desalination plants. Persian Gulf countries rely on the facilities for most of their fresh drinking water and sustained attacks could compound the impact of a war that’s already rattled the financial hubs in the region.
President Masoud Pezeshkian said he had instructed the military not to attack any nation that isn’t striking the Islamic Republic and apologized to neighboring countries. Trump said the remarks amounted to a surrender, but Tehran pressed ahead with strikes.
On Sunday, Pezeshkian said Iran’s adversaries had drawn “naive conclusions” from his earlier remarks, adding Tehran is “compelled” to respond to aggression carried out from other countries.
After naming Khamenei’s son to succeed him, the Assembly of Experts called upon the people of Iran — especially scholars and intellectuals in the seminaries and universities — to pledge allegiance to the new leader and preserve unity.
Iran’s armed forces have the capacity to sustain at least six months of high-intensity war at the current pace and will start using more advanced, rarely-used long-range missiles in coming days, state news agency IRIB said Sunday, citing the Islamic Revolutionary Guards Corps.
Israeli jets targeted Iranian oil depots in the Kuhak and Shahran areas of Tehran as well as the nearby city of Karaj, Iran’s semi-official Fars news agency reported. Explosions were heard in parts of the capital, where authorities urged residents to wear face masks and stay indoors, citing the air pollution risks from the debris clouds.
On Sunday, Israel’s military said it had struck some 400 targets in western and central Iran over the past day. Eli Cohen, Israel’s energy minister, said targets including oil refineries and power stations were on the table.
The Israeli military said the Home Front Command search-and-rescue forces, together with emergency teams, were operating at impact sites in center of the country following an Iranian missile attack. Five people were evacuated to hospitals.
The UAE, which pumped more than 3.5 million barrels a day as OPEC’s third-biggest producer in January, started cutting oil production at its offshore fields. Kuwait, OPEC’s fifth-biggest producer, reduced crude oil and refinery production, citing the “ongoing aggression” by Iran.
US gasoline prices have risen to the highest since September 2024. West Texas Intermediate surged 22% to as high as $111.24 a barrel at the open after last week added a record 36%, and Brent crude was trading near $110 – about $40 higher than last Friday.
Financial markets are being complacent about the war, with energy outages possibly ranking among the largest in recent history, according to Bloomberg Economics economist Ziad Daoud and geo-economic analyst Dina Estandiary.
“If attacks on regional energy infrastructure continue and the Strait of Hormuz remains shut, oil could surge toward $108 per barrel, posing serious risks to the global economy,” they said in a report.
Shares of Saudi Aramco climbed as much as 4.9% on Sunday, the most in nearly three years. Junaid Ansari, head of research and strategy at Kamco Investment Co., said the gain in oil prices would likely offset a decline in exports by the state-backed oil giant, and it should be able to re-route the bulk of its shipments to the Red Sea.
–With assistance from Susanne Barton, Omar Tamo and Arsalan Shahla.
(Updates with oil prices beginning in fourth paragraph.)
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