Iran and Israel trade fire as war impacts global supply chains

Israel and Iran exchanged missile fire as the war in the Middle East entered a seventh day, with the impact rippling across global supply chains and energy markets.

Oil headed for the biggest weekly surge since 2022, with shipping through the critical Strait of Hormuz at a near-total halt. Qatar warned that a protracted war could “bring down the economies of the world,” predicting that all Gulf energy exporters would shut down production within weeks, the Financial Times reported Friday, citing an interview with the country’s energy minister.

Danish container giant A.P. Moller-Maersk A/S suspended two services spanning the Far East to Europe due to security risks. A global bond rout continued unabated as concerns mount among traders that climbing energy prices will force central banks to slow their pace of rate cuts. The dollar is rising the most on a weekly basis since 2024.

Iran fired a barrage of missiles and drones targeting a number of Gulf countries overnight, while Israel — acting with the U.S. — maintained airstrikes on the Islamic Republic. Missile alerts were sent to residents in Dubai on Friday — the second in as many days — and Saudi Arabia, Kuwait and Bahrain all reported attacks.

Emerging markets, in particular, are seeing a sell off of their assets as the war approaches the end of its first week. Turkey has spent $12 billion, equal to roughly 15% of its foreign-currency reserves, to keep the lira stable this week.

President Donald Trump said Thursday that “action to reduce pressure on oil is imminent,” as U.S. gasoline pump prices advanced to the highest level since September 2024. Rising fuel prices could be particularly damaging for Trump ahead of midterm elections in November.

The U.S. Treasury issued a license for India to temporarily increase its purchases of Russian oil.

Trump vowed to “totally demolish” Iranian forces, telling NBC he wanted to “clean out” Iran’s leadership structure and he had names in mind to take over.

The U.S.-Israeli war has left at least 1,332 people dead in Iran so far, and dozens of others have been killed elsewhere in the region in retaliatory strikes. Six U.S. troops have been killed, all in the first two days of fighting.

Airlines remain hamstrung, with the number of canceled flights to Middle East hubs surpassing 23,000 since fighting began. Thousands of passengers remained stranded in the Gulf region.

In all, around a dozen countries have been embroiled in the conflict and the North Atlantic Treaty Organization said it’s increasing its alliance-wide ballistic missile defense posture.

Iran is poised to elect a successor to Supreme Leader Ali Khamenei, who was killed on Feb. 28, the first day of the conflict, and Mojtaba Khamenei, the slain leader’s second-oldest son, is in the running. Trump said he was a “lightweight” who wouldn’t change the regime’s policies and insisted on being personally involved in picking the country’s next leader.

Arab states reported intercepting Iranian projectiles overnight into Friday. Bahrain said a unit at its Sitra refinery, the region’s oldest, caught fire after being struck by a missile. Kuwait intercepted another drone and Qatar thwarted an attack targeting Al Udeid Air Base, a U.S. military facility. The U.S. suspended operations at its embassy in Kuwait.

Saudi Arabia said it had intercepted multiple missiles and drones overnight. Strikes have mostly been directed at Al Kharj near Riyadh, where the U.S. has a facility, or the east where Saudi Aramco operates its headquarters.

The kingdom is diverting millions of barrels of crude to a port on its Red Sea coast, helping the world’s top exporter maintain supplies.

Of the 500 ballistic and cruise missiles and 2,000 drones Iran has launched since the start of the war, about 60% were aimed at American targets, according to Iran’s Fars News Agency. Many of those U.S. assets are located in Gulf states.

Countries in Europe and Asia are moving to bolster the region’s defenses. Italy intends to send air-defense systems, as well as counter-drone capabilities, to the Gulf, Defense Minister Guido Crosetto said Thursday.

South Korea said it is in talks with the U.S. about the possible redeployment of weapons, including Patriot air-defense systems. France has authorized U.S. military support aircraft not involved in operations in Iran to use Istres Air Base, AFP reported.

NATO said it was boosting its missile defense posture following the downing on Wednesday of an Iranian missile heading toward Turkish airspace.

Trump, when asked by Reuters on Thursday if Ukraine could help with countering Iranian drones, said: “I’ll take any assistance from any country.”

Explosions were heard in parts of Tehran overnight, while Israel said Iran had launched a new wave of missiles at its cities. Hours earlier, Israel Defense Forces Chief of Staff Eyal Zamir said strikes have neutralized more than 60% of Iran’s ballistic missile launchers.

Israel’s attacks on Iran-backed Hezbollah in Lebanon continued, with Lebanese authorities saying at least 102 people have been killed since March 2.

Defense Secretary Pete Hegseth told reporters “it could be six, it could be eight, it could be three” weeks before operations are concluded. Trump told Politico the U.S. has an “unlimited supply of weapons,” remarks Hegseth echoed.

“Iran is hoping we cannot sustain this,” Hegseth told news conference later at Central Command’s headquarters in Florida,. “Our capabilities are overwhelming and gathering still, as are those of our Israeli partners. Our munitions are full up.”

Iran’s Islamic Revolutionary Guard Corps said retaliatory attacks will intensify in coming days, the country’s Nour news agency said.

Disputing the Trump administration’s claims on an Iranian outreach, the Islamic Republic’s Foreign Minister Abbas Araghchi told NBC News his country hasn’t asked for a ceasefire and had no intention to negotiate.

“We see no reason why we should engage once again with those” who are “not honest,” he said.

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—With assistance from Omar Tamo, Dana Khraiche and Dan Williams.