US-Iran War Enters New Phase: Oil Prices Surge to $100+ Amid Escalating Conflict

US President Donald Trump’s war on Iran has entered a new phase, and it looks less like a quick show of force than the opening stretch of a larger, riskier conflict.Driving the newsKhamenei 'ANNOYS' Trump With Last-Minute Curveball; Iran-US War 'Unavoidable' As Talks FractureOperation Epic Fury is entering a more combustible phase: Iran has installed Mojtaba Khamenei as supreme leader after the killing of Ayatollah Ali Khamenei, oil has vaulted above $100 a barrel, and President Donald Trump is signaling he still has room to escalate.The war, which began with US-Israeli strikes on Iran and is now in its second week, is no longer just a campaign against nuclear sites and military infrastructure. It is turning into a broader test of endurance, command and political will - one stretching from Tehran to Tel Aviv to the Gulf’s oil terminals and shipping lanes.The US-Iran conflict has entered its 10th day after another weekend of strikes on military and civilian-linked targets, Brent crude has jumped roughly 25% and crossed the psychological barrier of $100 a barrel.Israel Iran WarUS-Israel-Iran War News Live Updates: Iran fires first wave of missiles at Israel under new Supreme Leader Mojtaba KhameneiUS-Israel Rift Over Iran Strike: White House surprised by Israeli oil depot attacks; Iran warns of retaliationVideo shows thick black smoke rising after Iran hits Bahrain's largest BAPCO oil refinery — watchOil prices at its highest since 2022..That combination - leadership transition in Tehran, widening attacks across the region and surging oil - is why Epic Fury is starting to look less like a sharp punitive operation and more like the opening act of a regional war with no clear end state.Who is Mojtaba Khamenei?Mojtaba Khamenei has spent years as one of the most consequential opaque figures in Iranian politics. He held no major public-facing office under his father, but he has long been seen as a power center behind the scenes.by Taboolaby TaboolaSponsored LinksSponsored LinksPromoted LinksPromoted LinksYou May LikePremium Residential Plots from ₹2 Cr*Trident RealtyLearn MoreUndoAFP described him as a discreet but influential cleric closely tied to conservatives and to the Revolutionary Guard, which pledged allegiance to him quickly after his elevation. That allegiance is crucial. In modern Iran, supreme authority does not rest on clerical title alone. It rests on whether the coercive apparatus, above all the Revolutionary Guard, accepts and protects the leader at the top.His background has also made him familiar to Washington. The United States sanctioned him in 2019, saying he represented his father despite holding no elected office and worked closely with security services in furthering both regional ambitions and domestic repression.According to a Bloomberg investigation citing anonymous sources and Western intelligence reports, Mojtaba Khamenei amassed wealth estimated at more than $100 million, with money from oil sales allegedly routed into British real estate, European hotels, and Dubai property through shell companies.That portrait does not make him merely a son elevated by bloodline. It makes him a continuity figure in a much thicker sense: A man shaped by the same networks of clerical authority, security power, financial opacity, and anti-Western statecraft that defined his father’s rule.Why it mattersIran’s decision to go from one Khamenei to another is the clearest sign yet that Tehran is choosing continuity over compromise.FT reported that the selection of Mojtaba Khamenei, the son of the slain supreme leader, signals the Islamic republic intends to preserve its hardline posture toward the US, Israel and the west. The paper quoted Chatham House’s Sanam Vakil saying, “This is a signal that the regime in its current form has no inclination to compromise and they intend to resist at all costs.”That makes the succession bigger than a family story or clerical appointment. It is a wartime message: The system survived decapitation and is reorganizing around resistance, not surrender.It is also a direct answer to Trump. Before the succession was formalized, Trump had already dismissed Mojtaba as “unacceptable” and a “lightweight.” Trump then raised the pressure further by saying Iran’s next leader would need “approval from us” and warning, “If he doesn't get approval from us, he's not going to last long.”In other words, both sides are hardening in public at the same moment the battlefield is expanding.The big pictureThe war is now operating on three levels at once - military, political and economic.At the military level, Israel is broadening its target set. Israel struck oil depots in Tehran, creating thick smoke and environmental alerts in the capital. Israel has also attacked both Iran and Iran-backed Hezbollah in Lebanon, where authorities say more than half a million people have been displaced and more than 300 killed.Israeli Prime Minister Benjamin Netanyahu has vowed “many surprises” in the next phase of the war.At the political level, Tehran has used succession to close ranks. Mojtaba Khamenei had long been seen as a shadowy but potentially powerful figure, and the Assembly of Experts moved despite the obvious danger that any new supreme leader could also become a target. The decision looked less like routine clerical process than wartime defiance.At the economic level, the war has now hit the most sensitive nerve in the global system: energy flows through the Gulf. AP, citing Rystad Energy, said roughly 15 million barrels of crude a day - around 20% of global oil supply - typically transit the Strait of Hormuz. Reuters reported producers including Iraq, Kuwait and the UAE have already begun reducing output as storage fills and exports are disrupted.That is the real reason markets are panicking. This is not just a war in the Middle East.It is a war in the part of the Middle East that powers the global economy.Zoom inThe geography of the conflict is widening faster than the war’s public rationale.Bahrain accused Iran of striking a desalination plant, an extraordinary escalation given how essential those facilities are to drinking water in Gulf states. Kuwait said fuel tanks at Kuwait International Airport were targeted by drones. A missile also hit a helicopter landing pad inside the US Embassy complex in Iraq.Saudi Arabia said a falling military projectile killed an Indian citizen and a Bangladeshi national, while Kuwait reported two border guards killed, and the UAE said a driver died.That matters because Gulf monarchies have long tried to avoid becoming the main theater of direct retaliation. Iran’s broad missile and drone activity is testing that buffer. The head of the Arab League called Iran’s war strategy “reckless,” while Gulf and other regional states reported intercepting projectiles over areas with no US military presence.Tehran, meanwhile, is paying its own price. Iran did not update its previously reported death toll of more than 1,200 over the weekend, and some Iranians continued to flee the country. AFP described strikes around Tehran that killed at least four people and left residents choking on smoke from burning fuel. One resident told AFP, “The blaze has been burning for more than 12 hours, the air has become unbreathable. I can't even go out to do the daily shopping.”The war is now attacking daily life as much as military logistics.Between the lines:Oil at $100-plus is not just an energy story. It is the first real political referendum on Epic Fury.Brent’s surge was driven by the market’s view that there is “no obvious offramp” to the conflict. IG analyst Tony Sycamore told Reuters, “The violent reaction stems from the markets seeing no obvious offramp in the escalating Middle East conflict, now a high-stakes standoff where neither side appears willing to blink first.”ING, also quoted by Reuters, said, “the situation appears to be deteriorating further.”AP added more texture, reporting that tanker movement through Hormuz has nearly stopped and that attacks on oil and gas facilities by Iran, Israel and the US have compounded fears of disruption. The last time oil traded in this range was after Russia’s invasion of Ukraine.The downstream effects are already visible. The US gasoline prices rose to $3.45 a gallon on Sunday, up about 47 cents in a week, while diesel jumped roughly 83 cents to about $4.60.Agricultural commodities also surged, with palm oil, soybean oil, wheat and corn all catching a lift from the crude rally. Aluminium hit a four-year high on supply fears, while Qatalum and Aluminium Bahrain declared force majeure on shipments, Reuters said.This is how a regional war mutates into a global inflation problem.And the politics are unforgiving. Trump can argue that markets are overreacting or that the price spike is temporary.But once war shows up at the pump, it stops being an abstract foreign policy debate and becomes a domestic cost-of-living issue.What they are saying: Trump’s public line is that the pain is temporary and the stakes justify it.Trump called the oil spike “a very small price to pay” for ending Iran’s nuclear threat, writing: “Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace,” before adding: “ONLY FOOLS WOULD THINK DIFFERENTLY!”His energy secretary, Chris Wright, has tried to calm nerves.Wright said gas prices would be back under $3 “before too long,” and he told CNN, “Look, you never know exactly the time frame of this, but, in the worst case, this is a weeks, this is not a months thing.”But that reassurance is running into two problems.First, the military objectives are getting blurrier, not clearer. FT reported Trump has left the door open to deploying US ground forces under some circumstances, including to secure enriched uranium stockpiles.Axios reported US and Israeli officials had discussed special forces operations to secure those nuclear materials. Asked about it, Trump told ABC: “Everything is on the table. Everything.”Second, Washington is getting more nervous about what mission creep would mean. FT quoted Republican Sen Thom Tillis warning, “When you start putting boots on the ground, and those boots on the ground may need reinforcement, that starts looking like a longer-term conflict.”That is the contradiction at the center of Epic Fury: The White House wants to project control while preserving full escalation dominance, but the more options it keeps open, the more it feeds doubts that this war has boundaries.What next: Watch four pressure pointsOne is Tehran’s ability to make the Mojtaba succession stick in wartime. If the Guards remain unified and missile launches continue, Iran will argue the system remains intact despite the killing of its top leader.The second is Israel’s next wave. Netanyahu’s promise of “many surprises” suggests a broader and potentially more symbolic target set ahead, particularly against command nodes, missile units and energy infrastructure.The third is whether the US shifts from strategic ambiguity to operational expansion. The on ground-force deliberations, even if still hypothetical, suggests the internal debate has moved well beyond airpower.The fourth is oil. More than speeches, market pricing will tell you whether traders believe this conflict is containable. As long as Brent remains in triple digits and Hormuz traffic is impaired, the world is signaling that Epic Fury is no longer a limited war in investors’ minds.The bottom line: From one Khamenei to another, Tehran has shown it is built to absorb decapitation and keep fighting. With oil above $100, markets are showing they believe the war can still get materially worse. And with Trump insisting everything remains on the table, Operation Epic Fury is starting to look like the kind of campaign every White House promises will stay narrow - right until it doesn’t.(With inputs from agencies)