"Epic Fury", "Lion's Roar": these are the names of the military operations jointly launched by US and Israeli forces against strategic targets in Iran. The strikes hit military infrastructure and government complexes in Tehran. The Israeli military confirmed the killing of Iran's Supreme Leader, Ali Khamenei, as well as many senior military officials. In response, Tehran launched waves of ballistic missiles and drones against Israel, as well as against US and allied interests in the Gulf. Impacts were reported near Jerusalem and Tel Aviv, as well as on port infrastructure in Oman and the United Arab Emirates. Kuwait and Qatar intercepted many projectiles, while the US administration says it is seeking to destroy Iran's navy to limit Tehran's ability to block maritime routes.

An international community divided

The international community is reacting with concern at the risk of a regional conflagration. Beijing condemned the US-Israeli operation, calling the strikes an affront to Iranian sovereignty and urging an immediate ceasefire. Vladimir Putin denounced what he called a cynical violation of morality and international law.

Washington is sticking to a hard line. Donald Trump urged regime change in Tehran and warned that any further Iranian retaliation would be met with unprecedented firepower. US embassies in the region are on maximum alert.

In Europe, leaders are projecting a measure of unity in condemning Iranian actions, but their responses reflect a shared fear: an uncontrolled regional conflict with major economic repercussions, as Europe has become highly dependent on Middle Eastern hydrocarbons since sanctions were imposed on Russia. In a joint statement, Keir Starmer, Emmanuel Macron and Friedrich Merz condemned "with the greatest firmness" Iranian attacks on neighbouring countries. Nonetheless, European unity is fraying over the legitimacy of pre-emptive strikes. Spain has taken a strict line rejecting military action, whether by the US-Israeli axis or by Iran, as has Norway, which says Israeli strikes do not comply with international law.

The oil market: tension without an explosion

Oil is the main barometer of this crisis. Despite the intensity of the weekend's events, Brent is nearing but not crossing the $80 threshold. The increase is so far limited to 7% compared with Friday's close. Beyond Iran's future as a major oil producer, it is the shipment of Middle Eastern oil that is causing concern. In this regard, all eyes are on the Strait of Hormuz, where traffic is heavily disrupted. While Tehran has not announced a total blockade, many ships have dropped anchor as a precaution. Alternative infrastructure (Saudi and Emirati pipelines) can only compensate for part of the seaborne flows that pass through the Strait of Hormuz. At the same time, some shipping giants have suspended transits via Hormuz, and also via the Bab el-Mandeb Strait, to guard against possible reprisals by Iranian proxies in the region.

However, analysts are not, for now, anticipating a spike to $100-$130, nor a shock comparable to the crises of 1973 or 1990. Several factors explain this dynamic:

  • The geopolitical risk premium priced into crude was already significant.
  • In a bid to calm the situation, Saudi Arabia, Russia and their OPEC+ allies decided on Sunday to increase production by 206,000 barrels a day for April, a larger volume than expected. The expanded cartel could also raise supply further if necessary.
  • Although shipping is heavily disrupted, passage through the Strait of Hormuz is not 100% locked down at this stage.
  • The United States has strategic reserves (SPR) that it could release to cool prices.

In the weeks ahead, two elements will be decisive: how long this open conflict lasts and the ability of international players to restore the security of maritime traffic. Those two parameters are indeed what could turn a regional crisis into a global economic shock.