Published by Global Banking & Finance Review®
Posted on March 9, 2026
5 min readLast updated: April 1, 2026
Add as preferred source on GoogleIran’s Assembly of Experts appointed Mojtaba Khamenei, hardline son of the late Ali Khamenei, as the new Supreme Leader amid the escalating U.S.–Israeli war; oil prices surged and Asian markets plunged while the Pope warned of growing regional hatred and fear.
By Parisa Hafezi, Maayan Lubell and Nandita Bose
DUBAI/JERUSALEM/DORAL, Florida, March 9 (Reuters) - U.S. President Donald Trump on Monday threatened to escalate the war with Iran if it blocked oil shipments from the Middle East, even as he predicted a quick end to the conflict.
Trump's warning came at the end of a day that saw global financial markets seesawing on concerns that Iran's security establishment was rallying behind new Supreme Leader Mojtaba Khamenei and was not prepared to back down any time soon.
Trump said the United States had inflicted serious damage on Iran's air force and navy and predicted the conflict would end well before the initial four-week time frame he had laid out, though he has not defined what victory would look like.
He warned that U.S. attacks could rise sharply if Iran sought to block tanker traffic through the Strait of Hormuz, which handles one-fifth of the world's oil supply.
“We will hit them so hard that it will not be possible for them or anybody else helping them to ever recover that section of the world," Trump said at a news conference.
IRAN SAYS IT WILL DETERMINE END OF WAR
In response, Iran's Revolutionary Guards said it would not allow "one liter of oil" to leave the region if attacks from the United States and Israel continue.
"We are the ones who will determine the end of the war," a spokesperson said, according to state media.
The conflicting signals sent markets on a rollercoaster, with oil prices surging and stock markets nosediving before swinging in the other direction after Trump's prediction of a quick end to the war and reports of a possible ease in sanctions on Russian energy.
Khamenei, 56, a Shi'ite cleric with a power base among the security forces and their vast business empire, has been declared unacceptable by Trump, who has demanded Iran's unconditional surrender.
Iranian state media showed large crowds in several cities rallying behind the new leader, waving Iranian flags and holding portraits of his father Ali Khamenei, the supreme leader killed by an Israeli strike on the war's first day.
In Isfahan, state TV reported the sound of nearby explosions from apparent airstrikes as loyalists gathered in the historic Imam Square, chanting "God is the Greatest" below a stage with portraits of Ali and Mojtaba Khamenei.
Iranians reached by telephone were divided, with supporters of the authorities hailing the choice and opponents fearful it would dash their hopes for change.
"It was a slap in the face to our enemies that thought the system will collapse with the killing of his father. Our late leader's path will continue," said university student Zahra Mirbagheri, 21, from Tehran.
Many Iranians had initially celebrated the elder Khamenei's death, weeks after his security forces killed thousands of anti-government protesters in the worst domestic unrest since the era of Iran's 1979 revolution. But there has since been little sign of anti-government activity.
"The (elite Revolutionary) Guards and the system are still powerful. They have tens of thousands of forces ready to fight to keep this regime in place. We, the people, have nothing," said Babak, 34, a businessman in the central city of Arak who asked to keep his family name confidential.
Israel says its war aim is to overthrow Iran's system of clerical rule. U.S. officials mainly say Washington's aim is to destroy Iran's missile capabilities and nuclear programme, but Trump has said the war can end only with a compliant Iranian government.
Israel had said it would kill whoever succeeded the elder Khamenei unless Iran ended its hostile policies.
OIL SURGES, THEN DIPS BACK
The war has effectively shut the Strait of Hormuz, a chokepoint for global oil and liquefied natural gas transport, leaving tankers unable to sail for more than a week and forcing producers to halt pumping as storage fills.
Brent crude futures jumped about 7% to settle at their highest price since 2022 after soaring by as much as 29% during the session, as Saudi Arabia and other OPEC members cut supplies. But prices fell in post-settlement trade.
The price of gasoline has particular political resonance in the United States, where voters cite rising costs as a top concern ahead of the November midterm elections, when Trump's Republicans will try to keep control of Congress.
A Reuters/Ipsos poll released Monday found 67% of Americans expect gas prices to rise over the coming months, and only 29% approve of the war.
After speaking with Russian President Vladimir Putin, Trump said the United States will waive oil-related sanctions on "some countries" to ease the shortage. According to multiple sources, that could mean a further easing of sanctions on Russian oil, which could complicate efforts to punish Moscow for its war in Ukraine. Other options include a possible release of oil from strategic reserves or restricting U.S. exports, sources said.
OIL REFINERY HIT
Tehran was choked in black smoke after an oil refinery was hit, an escalation in strikes on Iran's domestic energy supplies. World Health Organization chief Tedros Ghebreyesus warned the fire risks contaminating food, water and air.
Turkey said NATO air defences had shot down a ballistic missile that was fired from Iran and entered Turkish airspace, the second such incident of the war. Iran did not immediately comment on the report.
Israel's military said it had launched new attacks in central Iran and struck the Lebanese capital Beirut, where Israel has extended its campaign after the Iran-backed militia Hezbollah fired across the border.
U.S.-Israeli attacks have killed at least 1,332 Iranian civilians and wounded thousands, according to Iran's U.N. ambassador. Lebanon has reported more than 400 people killed
Mojtaba Khamenei, son of the late Ali Khamenei, has been appointed as Iran's new Supreme Leader by the Assembly of Experts.
The US-Israeli war with Iran has caused oil prices to surge and triggered a nosedive in Asian stock markets.
Pope Leo warned of a 'tragedy of enormous proportions' due to the widespread climate of hatred and fear in the Middle East.
The conflict has killed over 1,300 Iranian civilians, wounded thousands, and damaged critical infrastructure across several countries.
The appointment has drawn ire from US President Trump, who said Washington should have a say, and threats from Israel targeting the new leader.
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