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Friday, March 20, 2026

Oil Markets Shudder as Iran-Israel War Draws in Gulf States and US Troops

The Iran-Israel conflict expanded dramatically over the weekend, pulling in Gulf states, American troops, and, reportedly, Russian intelligence agencies in a spiral of escalation that sent oil prices above $100 per barrel for the first time in years. The speed of the expansion alarmed analysts who had hoped the conflict might remain contained.
Israeli forces struck oil storage and fuel distribution facilities in and around Tehran, killing four workers and covering the capital in thick black smoke. Iran’s Revolutionary Guards threatened to retaliate not only against Israel but against Gulf states that allowed their territory to be used in support of the attacks.
Those threats materialized rapidly. Saudi Arabia, the UAE, Qatar, Bahrain, and Kuwait all reported Iranian strikes. Saudi defenses intercepted 15 drones, a desalination plant in Bahrain was damaged, and two Saudi civilians were killed. An American service member died from wounds sustained in an Iranian strike in Saudi Arabia, the seventh US fatality in the conflict.
Reports suggested Russia had been providing Iran with intelligence to help target US military installations, a development that, if confirmed, would represent a significant escalation of great-power involvement in the conflict and could dramatically complicate diplomatic efforts.
Iran’s clerical body appointed Mojtaba Khamenei as the new supreme leader following his father’s death, continuing the political upheaval that has accompanied the military conflict. The appointment marked the first hereditary transfer of supreme leadership in Iran’s history since the 1979 revolution and was seen by analysts as unlikely to produce any moderating influence on Tehran’s foreign policy.

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