Key Things to Know About the US-Israel Conflict With Tehran

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Defense systems were fighting off missiles and drones from Dubai’s glitzy skyscrapers and wealthy enclaves, where residents reported hearing more blasts Sunday. CENTCOM confirmed some “minimal” damage to US installations. Israel was also targeted. 

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In a sign of Iran’s growing isolation, countries across the Gulf are stepping up their criticism of Tehran’s strikes. While Sunni Arab states in the Gulf have long had tense relations with the Shia-majority Iran, in recent years the likes of Saudi Arabia and the UAE had sought to improve relations. The current crisis looks to deal a setback to those efforts. 

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Dubai Residents Report Hearing More Blasts Sunday Morning

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‘Return to Your Senses’: Gulf States Ramp Up Criticism of Iran

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Dubai’s Worst Nightmare Unfolds as Iran Strikes Gulf Neighbors

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Missiles Seen Over Abu Dhabi Financial Hub Dent Safe Haven Image

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UAE, Saudi Leaders Break Ice to Discuss Iran Missile Attacks

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Oil 

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Oil markets are pricing in a “widening escalation cycle” pushing Brent crude toward $80 a barrel after US strikes on Iran, according to a Bloomberg Intelligence analysis. OPEC+ on Sunday agreed in principle to a slightly larger increase in oil production next month, delegates said, as the conflict threatened to bolster a rally in crude prices.

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Oil and gas shipping remains largely paused in the Strait of Hormuz, as Iran cranks up threats to vessels transiting through the chokepoint. Mohsen Rezaei, a member of the Expediency Discernment Council that advises Iran’s supreme leader, said on state TV that “no American ship is allowed to enter the Persian Gulf.” Earlier, the US warned ships to stay away from the Persian Gulf and Arabian Sea, specifically 30 nautical miles from American military assets. 

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A small oil tanker, which appears to be sanctioned by the US for helping Iran export fuels, was targeted off Oman’s northern coast, though it was unclear who was behind the attack. 

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OPEC+ Agrees in Principle to Larger Oil Hike, Delegates Say

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Ships Avoid Hormuz as Iran Media Says It’s Practically Shut

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France’s CMA CGM Suspends Vessels’ Passage Through Suez Canal

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What’s at Stake for Oil Markets as Trump Attacks Iran

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Travel Disruptions

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Airlines across the Persian Gulf extended their suspension of operations as retaliatory strikes from Iran enter a second day, causing major disruptions at some of the world’s busiest airports. Emirates, the world’s largest international airline, suspended flight movements indefinitely, while Etihad Airways extended cancellations until 2 am on Monday. Qatar Airways said all flights are still halted and that it would provide an update 9 am on Monday. 

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Several airports in the Gulf were hit in the crossfire, with Abu Dhabi Airport reporting that one person died and several were injured overnight after the emirate intercepted an Iranian drone. The main airports of Dubai, Bahrain and Kuwait were also struck 

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Gulf Airlines Extend Flight Cancellations as Iran Targets Hubs

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Dubai Airport Damaged in Strike After Iran Retaliates Attack

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Impact on Markets

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All eyes will be on energy markets when trading fully re-opens on Monday, macro traders said, with early indications of volatility also expected when the US dollar and other currencies start to trade in Australia. 

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Already, the threat of military action had driven the price of oil up last week. Brent crude increased 2.5% to $72.48 per barrel on Friday, the highest closing price since July. It’s gained almost 20% this year. 

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Bitcoin meanwhile staged a tepid recovery. Prices rose as much as 2.2% to $68,196 after Iran confirmed the death of Khamenei, before falling back to about $66,500 at 6 a.m. in New York.

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Wall Street Turns to ‘Haven-First’ Strategy Amid Iran Crisis

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Bitcoin Stages Tepid Recovery as Iran Strikes Stir Uncertainty