Iran Names New Supreme Leader as Trump Downplays Oil Spike

Iran named the son of the late Ayatollah Ali Khamenei as its new supreme leader and President Donald Trump called $100 oil a “small price to pay,” with neither side showing any sign of deescalating a war now entering its 10th day.

Mojtaba Khamenei, 56, won a “decisive vote” in Iran’s Assembly of Experts, the semi-official Fars news agency reported Sunday. The Islamic Revolutionary Guard Corps, one of Iran’s most powerful and feared organizations, pledged full obedience to the new leader in a statement. 

Trump, meanwhile, said the US and Israeli military campaign against the Islamic Republic was worth any near-term pain because it would bring long-lasting benefits.

“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,” he wrote Sunday evening in a social media post shortly after oil markets opened.

Brent surged as much as 28% to $118.73 a barrel, the biggest intraday move since April 2020, while West Texas Intermediate rose 31%. Kuwait and the United Arab Emirates have started reducing output as storage rapidly fills due to the near-closure of the Strait of Hormuz, through which about a fifth of the world’s energy exports transit.

Arab states across the Persian Gulf and Israel continued to face incoming missiles and drones from Iran, which said it had the capacity to sustain the war for months. Israel struck fuel depots in Tehran and threatened the Islamic Republic’s power grid, sparking a warning from the Red Crescent about toxic acid rain.

Trump is also weighing the option of deploying special forces on the ground to seize Iran’s near-bomb-grade uranium, as officials grow increasingly concerned the stockpile may have been moved, according to three diplomatic officials briefed on the matter.

“They haven’t been able to get to it and at some point, maybe we will,” Trump said late Saturday during a briefing aboard Air Force One. “We haven’t gone after it, but it’s something we can do later on. We wouldn’t do it now.”

The UAE, Kuwait, Saudi Arabia and Bahrain said they intercepted Iranian attacks over the weekend. Late Sunday, Kuwait said its air defenses intercepted three ballistic missiles and destroyed two drones, while two other drones targeted areas near Kuwait’s international airport, which caused fuel depots to explode.

A water desalination plant in Bahrain sustained material damage following an Iranian drone attack, the country’s government said, adding that there was no impact on water supplies.

The Iranian strike on Bahrain came after Tehran accused the US of hitting one of its water desalination plants. Persian Gulf countries rely on the facilities for most of their fresh drinking water and sustained attacks could compound the impact of a war that’s already rattled the financial hubs in the region.

The US State Department ordered American employees and diplomats in Saudi Arabia to leave the country, citing safety risks. Non-critical American government staff and their families stationed at diplomatic posts in the area had previously been given the option to depart voluntarily, but now are ordered to do so.

Iranian President Masoud Pezeshkian said he had instructed the military not to attack any nation that isn’t striking the Islamic Republic and apologized to neighboring countries. Trump said the remarks amounted to a surrender, even as Tehran’s military pressed ahead with strikes.

On Sunday, Pezeshkian said Iran’s adversaries had drawn “naive conclusions” from his earlier remarks, adding Tehran is “compelled” to respond to aggression carried out from other countries.

After naming Khamenei’s son as Iran’s new leader, the Assembly of Experts called upon the nation’s citizens — especially scholars and intellectuals in the seminaries and universities — to pledge allegiance to him and preserve unity.

Iran’s armed forces have the capacity to sustain at least six months of high-intensity war at the current pace and will start using more advanced, rarely used long-range missiles in coming days, state news agency IRIB said Sunday, citing the Islamic Revolutionary Guards Corps.

Trump is “not happy” with Mojtaba Khamenei’s appointment as the new supreme leader of Iran, Fox News host Brian Kilmeade said after speaking with the president.

Israeli jets targeted Iranian oil depots in the Kuhak and Shahran areas of Tehran as well as the nearby city of Karaj, Iran’s semi-official Fars news agency reported. Explosions were heard in parts of the capital, where authorities urged residents to wear face masks and stay indoors, citing the air pollution risks from the debris clouds.

Iran said it had launched a new wave of missiles against Israel, according to IRIB. The Israel Defense Forces said systems were operating to intercept the threat while sending out a precautionary directive to areas in the firing line.

The IDF later said it struck infrastructure belonging to Iran-backed Hezbollah in the Beirut region of Lebanon, and started an additional wave of strikes in central Iran, according to a post on Telegram.

On Sunday, Israel’s military said it had struck some 400 targets in western and central Iran over the past day. Eli Cohen, Israel’s energy minister, said targets including oil refineries and power stations were on the table.

The Israeli military said the Home Front Command search-and-rescue forces, together with emergency teams, were operating at impact sites in the center of the country following an Iranian missile attack. Five people were evacuated to hospitals.

The UAE, which pumped more than 3.5 million barrels a day as OPEC’s third-biggest producer in January, started cutting oil production at its offshore fields. Kuwait, OPEC’s fifth-biggest producer, reduced crude oil and refinery production, citing the “ongoing aggression” by Iran.

Bloomberg Economics economist Ziad Daoud and geo-economic analyst Dina Esfandiary said financial markets are being complacent about the war, with energy outages possibly ranking among the largest in recent history.