[ANALYSIS] Iran War enters Day 10 - Energy surges, G7 finance ministers and IEA emergency meeting due

OVERVIEW

Israel struck Iranian fuel infrastructure around Tehran over the weekend, while Iranian missile and drone pressure on Gulf states and Israel continued.
Iran appointed Mojtaba Khamenei as supreme leader on Sunday, 8 March, signalling hardline continuity rather than any political reset. Iran’s Revolutionary Guards said they were ready to follow and obey the new supreme leader.
Oil is the key Monday story: Brent and WTI surged 30% at one point in Asian trade, briefly moving toward USD 120/bbl before easing, while European gas prices jumped at the open. Prices eased after the FT reported on an emergency G7 and IEA meeting.
G7 finance ministers and IEA chief Fatih Birol are due to hold an emergency call at 8:30 am New York / 12:30 pm UK on Monday (4 hour difference after the US clock change) to discuss a coordinated reserve release.
According to the FT, some US officials view a 300mln–400mln barrel release as appropriate, around 25%–30% of the IEA system’s roughly 1.2bln-barrel reserve base. The FT report said three G7 countries, including the US, have so far expressed support for the idea. On Tuesday, the IEA will hold an emergency meeting to mull options on the emerging oil supply crisis.
Traders may be conscious of the energy-induced price shocks seen during the early days of the Russia-Ukraine war in 2022.

ENERGY

Monday’s oil move was driven by a concoction of Gulf supply disruption, Hormuz risk and hardline political continuity in Tehran.
Brent and WTI surged sharply in Asian trade, with front-end panic driven by shipping fears and worsening infrastructure damage. European Nat Gas also surged.
Prices eased following reports of the G7 emergency meeting.

Factors underpinning crude:

Supply Disruptions

Major regional producers, including Iraq, Kuwait, and the UAE, began cutting oil production by millions of barrels as storage facilities reached capacity.
Bahrain’s Bapco Energies declared force majeure after an attack on its refinery complex, though it said domestic supply would continue.
Iraq alone reportedly slashed output by 1.5mln BPD due to the inability to ship crude.

Strait of Hormuz

The waterway, which handles 20% of global oil supply, remained "effectively shut," with tanker traffic dropping by 80–90%.
Reports from the UK Maritime Trade Operations (UKMTO) highlighted severe GPS interference and attacks on several vessels, making the passage too dangerous for commercial shipping.
War-risk insurance premiums skyrocketed, forcing many operators to drop anchor outside the Gulf rather than risk transit
Saudi Aramco reportedly offered crude through rare tenders as the conflict disrupted normal export patterns.
Analysts note that while the Red Sea route cannot replace all barrels typically passing through Hormuz, it can cushion the global shock by providing a workaround for a fraction of supply.

Iranian Hardline Continuation

The Assembly of Experts officially named Mojtaba Khamenei as the new Supreme Leader, signalling that Iran will maintain its confrontational stance against the US and Israel.
IRCG pledged loyalty to the Supreme Leader. Analysts see the succession as a continuation of blockages and regional strikes.

Reserve response

The G7/IEA call is due later on Monday at 8:30 am New York / 12:30 pm UK.
The FT reported some US officials favour a 300mln–400mln coordinated release.
That equates to roughly 25%–30% of the IEA system’s roughly 1.2bn barrels of strategic reserves.

US / TRUMP COMMENTARY

Trump said there would have to be a very good reason for the US to deploy ground troops in Iran, and separately said Kurdish forces would not be sent into Iran.
Trump said his demand for Iran’s unconditional surrender could mean either Iran announces it or Iran “can’t fight any longer”.
Trump also said he had met major US defence manufacturers and that they had agreed to quadruple production of “Exquisite Class” weaponry.
Trump publicly said Britain’s help was not needed to win the war, deepening the public US-UK political rift.
Reporting suggested Trump was considering the option of deploying special forces to seize Iran’s near-bomb-grade uranium.
Trump argued the oil spike was a short-term price worth paying if the war removed the Iranian nuclear threat.
Trump posted "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. ONLY FOOLS WOULD THINK DIFFERENTLY!"

ATTACKS CONTINUE

Israel / Iran / Lebanon

Israel struck fuel tanks and storage sites in and around Tehran late Friday into Saturday, deepening pressure on Iran’s energy-linked infrastructure.
Israel also continued strikes linked to Iranian and Hezbollah activity in Lebanon, with the Lebanon front remaining active through the weekend.
Israeli messaging also hardened around Iran’s succession process, with warnings that anyone involved in appointing a successor could be targeted.
In Israel, Iranian missile attacks reportedly caused a power outage in Tel Aviv, while launches were also reported toward northern Israel and the Lachish area.

Gulf spillover

Gulf states remained under sustained Iranian missile and drone pressure through the weekend. Qatar, Kuwait, Bahrain, Saudi Arabia and the UAE all remained exposed.
Two Kuwaiti interior ministry officers were reported killed on Sunday while performing their duties during the attacks.
UAE President Mohammed bin Zayed warned the country’s enemies that the UAE was “not easy prey”.
Qatar’s PM said trust with Iran had been badly shaken and urged de-escalation, while insisting Iran must stop attacks on Gulf countries and others not involved in the war.
Qatar’s defence ministry said its armed forces responded to a missile attack, while multiple explosions and ballistic missile interceptions were reported over Doha.
Qatar’s rhetoric hardened sharply; Doha still called for de-escalation, but the tone moved from mediation toward open anger over Iran’s attacks on Gulf states.
Bahrain was also hit, with a desalination plant reportedly struck and later refinery disruption becoming a major energy-market concern.
Saudi Arabia, the UAE, Kuwait and Bahrain all reported overnight interceptions into Sunday.
Saudi Arabia reportedly intercepted drones heading toward the Shaybah oil field, a major production site.
Iraqi media reported air defences shot down a drone targeting Victoria base at Baghdad airport.
Saudi Arabia and Pakistan reportedly discussed joint steps to stop Iranian drone and missile strikes on the kingdom.
Saudi Arabia’s foreign ministry said the kingdom reserved the right to take all measures necessary to protect its security.

IRANIAN COMMENTARY

Iranian President Pezeshkian said on Saturday that he had instructed the military not to attack countries not striking Iran and apologised to neighbours for attacks on their soil.
Foreign Minister Araghchi said he remained in contact with his Saudi counterpart and said Saudi officials were committed to not letting their territory, waters or airspace be used against Iran.
Iranian top security official Larijani said the US must pay for its actions and warned Tehran would continue attacking neighbouring states if their territory was used for attacks on Iran.
An IRGC spokesman challenged Trump to have US vessels escort oil tankers through the Strait of Hormuz.

GLOBAL HEADLINES

UK PM Starmer and US President Trump later spoke on Sunday about the Middle East and military cooperation, including the use of RAF bases in support of regional defence.
The US State Department ordered diplomats to leave Saudi Arabia, citing growing regional risk.
One of the UK’s two aircraft carriers was placed on advanced readiness from Saturday, fuelling speculation it could deploy to support British interests.
The USS Gerald R. Ford was reported to have left the eastern Mediterranean, crossed the Suez Canal and moved into the Red Sea.
The US embassy in Oslo sustained minor damage in an explosion early amid a suspected act of terrorism on Sunday; there were no casualties.