Global markets are moving sharply into risk-aversion mode after the United States launched military strikes against Iran overnight, triggering a fierce exchange of fire.
The US Central Command confirmed it carried out a “series of powerful strikes” late Monday, targeting more than 80 locations across Iran in a single night.
Officials said the attacks were launched “to impose heavy costs for targeting and attacking commercial shipping crewed by innocent civilians in an international waterway.”
Tehran responded swiftly, vowing to deliver a “crushing response” as tensions across the region escalated rapidly following the military exchanges.
The Islamic Revolutionary Guard Corps said it targeted 85 US military sites across Bahrain and Kuwait as part of its retaliatory strikes.
Bahrain, which is home to the US Navy’s Fifth Fleet, sounded missile alert sirens as the confrontation intensified in the hours after the initial US assault.
The breakdown of a fragile ceasefire, which had been set to expire in August, followed weeks of stalled negotiations over Iran’s nuclear capabilities and control of the Strait of Hormuz.
Iranian state media reported “renewed explosions” on Qeshm Island and Kharg Island overnight, with Kharg Island hosting Iran’s main oil terminal in the Persian Gulf.
The return to open conflict sent oil prices sharply higher, with Brent crude jumping to $76 per barrel from $72 previously, rattling energy markets globally.
London-listed stocks are expected to open lower as investors digest the implications of a broader military confrontation between Washington and Tehran.
The renewed hostilities come at a sensitive moment for global trade, with the Strait of Hormuz remaining one of the world’s most critical shipping corridors for crude oil exports.
Market participants will be watching closely for any further escalation, particularly given the proximity of US naval assets to the ongoing conflict zone in the Gulf region.