Oil traders ended the weekend bracing for the possibility of $200 per barrel crude, after Iran’s Revolutionary Guards issued the threat explicitly and the conflict that prompted it showed no signs of slowing. The warning came as Israeli strikes on Iranian oil facilities pushed prices above $100 for the first time in years.
Israeli forces struck oil storage and fuel distribution sites in and around Tehran, killing four workers and blanketing the capital in smoke. Iran’s Revolutionary Guards responded by threatening $200 crude and launching fresh strikes against Saudi Arabia, the UAE, Qatar, Bahrain, and Kuwait — a campaign that damaged a Bahraini desalination plant, killed two Saudi civilians, and claimed the life of a seventh US service member.
Reports that Russia had been providing Iran with targeting intelligence for attacks on US military assets in the region raised the geopolitical stakes of the conflict significantly. If confirmed, the reports would suggest that global powers were now directly involved in shaping the military outcomes of a war that had already caused billions of dollars in energy market disruption.
Iran’s clerical body appointed Mojtaba Khamenei as supreme leader amid the fighting, a historic and controversial decision that consolidated hardline authority at the apex of Iranian governance. The new leader’s background and affiliations gave traders little reason to expect any near-term de-escalation.
The United States pledged not to target Iranian oil infrastructure and predicted only short-term supply disruptions. But with $200 oil now openly discussed, the conflict expanding to new countries, and the world’s energy markets watching every development, the trajectory of prices over the coming weeks would depend entirely on how quickly — or slowly — the fighting came to an end.