Iran’s Leader Threatens New Fronts in US-Israel War

Iran’s new supreme leader on Thursday rejected US threats of a widening war and its calls for his nation’s “unconditional surrender.” Instead, Mojtaba Khamenei doubled down on the Islamic Republic’s retaliation campaign against American allies around the Gulf and pledged to keep the Strait of Hormuz effectively shut.

In his first public comments since succeeding his father, who was killed in a targeted strike by the US and Israel at the outset of the war, Khamenei warned that Tehran will look to open other fronts if the US and Israel persist in their bombing campaign. Almost 2,000 people in Iran and Lebanon have been killed since the war began, while dozens across the Persian Gulf also have died.

International and US efforts to mollify oil markets continued to fail in the face of the long-feared worst-case scenario. Oil prices rose more than 9% with Brent crude ending the session above $100 for the first time since August 2022. US crude futures also settled at the highest levels in more than three years.

Three commercial vessels were struck in the Arabian Gulf over the past 24 hours, and the blockage of the Strait of Hormuz has disrupted millions of barrels a day of supply, causing what the International Energy Agency described as the biggest hit to global production on record. Iran has likely begun laying mines in the Strait, UK Defense Secretary John Healey said, though Iran’s deputy foreign minister reportedly denied it.

“Studies have been conducted into opening other fronts where the enemy has little experience and would be highly vulnerable,” Khamenei, a 56-year-old hardline cleric, said in a statement published by Iran state media. “Their activation will take place if the state of war persists.” —David E. Rovella

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Deutsche Bank flagged a $30 billion exposure to private credit, an asset class increasingly battered by fund redemptions, scrutiny of underwriting standards and the threat of artificial intelligence on its borrowers. The lender said it is not exposed to “significant risks” related to non-bank financial institutions, but that it could face potential indirect risks through interconnected portfolios and counterparties.

The $1.8 trillion private credit market is witnessing an exodus of investors after some high-profile corporate blowups led to mounting concerns over loan quality and exposure to AI-vulnerable software firms. JPMorgan is restricting some lending to private credit funds after marking down the value of certain loans in their portfolios.

Stocks dived again on Thursday as sinking markets and rising oil prices continue to complicate Donald Trump’s war agenda at a time when his party is under increasing pressure about affordability. Goldman Sachs warned that oil prices could exceed the 2008 peak if flows via the Strait of Hormuz remain depressed through March. Brent rallied to a high of $147.50 that year.

The Iran war is causing unprecedented turmoil in oil markets, hitting 7.5% of global supply and an even bigger swath of exports, the International Energy Agency said. Here’s your markets wrap.

The US, Japan and the European Union are said to plan an announcement in the coming weeks about laying the foundation for a trade agreement in critical minerals. The Office of the US Trade Representative, which has led negotiations with Brussels and Tokyo on the framework, will also head talks for a trade deal that is set to include a price floor and tariffs for the materials to counter any market distortions by China.

Global efforts to diversify critical minerals supply chains intensified after Beijing last year imposed sweeping export controls, including on rare earths and critical minerals, in response to Trump’s global trade war. Beijing has threatened it would retaliate against the formation of a bloc that would target its exports.

The number of Iranian missile launchers has held steady after a week of unrelenting airstrikes, according to Israeli and western estimates, indicating the difficulty of finding small, mobile targets without having complete control of the skies.

The mobile launchers are key to Iran’s ability to fire its large supply of ballistic missiles. But finding the vehicles in such a large country, especially when some airspace is still dangerous for US and Israeli aircraft, poses a huge challenge. Meanwhile, Tehran has long been aware the launchers will be targeted.

“It’s likely that the Iranians are adapting tactics,” said Ankit Panda, a senior fellow at the Washington-based Carnegie Endowment for International Peace. “It’s quite possible that they’re just preserving launchers by slowing down operations.”

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