People gather to mourn the death of Iran’s supreme leader Ayatollah Ali Khamenei, who was killed in joint US and Israeli strikes, at a square in Tehran on March 1, 2026.
Atta Kenare | Afp | Getty Images
What you need to know today
U.S. President Donald Trump said Sunday he will “avenge” the deaths of three U.S. service members, in a pre-recorded Truth Social post Sunday afternoon. He added that combat operations in Iran that began Saturday will continue. Earlier Sunday, U.S. Central Command said three U.S. service members were killed — the first of the conflict.
Meanwhile, Iran may “lash out harder” after the joint U.S.-Israel strikes on Iran killed Supreme Leader Ayatollah Ali Khamenei, said David Silbey, a professor of military history at Cornell University. Retaliatory attacks could include missile strikes on Israeli and U.S. military bases and vessels in the Persian Gulf, as well as potential terrorist operations across the Middle East, Europe and the United States.
A prolonged closure of the Strait of Hormuz, a critical transit route for global crude with about 13 million barrels per day moving through it in 2025, could lead to a 1970s-style energy shock. If Iran closes the Strait, it could “drive oil prices into the triple digits, while LNG prices retest the record highs of 2022,” said Saul Kavonic, head of energy research at MST Marquee.
U.S. crude oil prices jumped more than 7% Sunday evening stateside amid fears of a major supply disruption. “Tankers are starting to build by the Strait of Hormuz, but nothing seems to be going through at the moment – tankers are definitely spooked,” said Matt Smith, oil analyst at energy consulting firm Kpler.
U.S. futures sank in overnight trading, adding to a list of growing worries for investors. It comes amid renewed concerns about the impact of rapid AI adoption on software firms. The S&P 500 sold off Friday and finished in the red for February.
Airlines canceled hundreds of flights in the Middle East, while others were diverted mid-flight amid airspace closures over a large area of the region due to security concerns. Air India said it was suspending all flights to the Middle East on Saturday, as well as flights between India and both Europe and the U.S. scheduled for Sunday.
And finally…
How the attack on Iran could impact the global oil market and economy
The joint U.S. and Israeli attack on OPEC member Iran risks a major oil supply disruption in the Middle East. The Islamic Republic shares a coastline with the Strait of Hormuz, the world’s most important waterway for the global oil trade.
“A prolonged closure of the Strait of Hormuz is a guaranteed global recession,” McNally said.
“What you would see is hoarding, especially by Asian countries that were big importers of oil and gas when they realized that Hormuz is closed,” McNally added. “You would see the mother of all bidding wars.”