US and Israel Kill Iran's Supreme Leader, Paralyze Hormuz Strait

The United States and Israel launched a coordinated military campaign, Operation Epic Fury, on February 28, 2026, targeting over 1,000 Iranian sites including ballistic missile facilities. The strikes resulted in the deaths of Supreme Leader Ayatollah Ali Khamenei and Armed Forces Chief of Staff Abdolrahim Mousavi. In response, Iran established an interim Leadership Council and launched retaliatory missile and drone attacks against U.S. bases and targets in Qatar, Kuwait, Bahrain, and the United Arab Emirates, including the Burj Al Arab hotel in Dubai.

Tehran effectively paralyzed global energy trade by declaring the Strait of Hormuz closed to international navigation. The Islamic Revolutionary Guard Corps (IRGC) issued VHF warnings and launched projectile attacks against commercial vessels, including a Palau-flagged tanker. These actions, combined with widespread GPS jamming near Bandar Abbas, forced shipping giants such as Maersk, Hapag-Lloyd, and CMA CGM to suspend transit through the strait and reroute vessels around the Cape of Good Hope, avoiding the Suez Canal and Bab el-Mandeb Strait.

The escalation caused Brent crude prices to spike, briefly exceeding $104 per barrel, and triggered a surge in gold prices. Marine insurers began canceling war-risk cover or raising premiums by up to 50%. India faced severe economic vulnerability due to its reliance on the strait for roughly 40-50% of its crude imports. The conflict wiped out over Rs 7.5 lakh crore in Indian investor wealth and disrupted exports of textiles and gemstones. To stabilize markets, OPEC+ increased production quotas by 206,000 barrels per day for April.