(Bloomberg) -- The US and Iran ruled out a quick end to the war as a third day of blasts rocked the Middle East from the Mediterranean to the Persian Gulf, sending global stock and bond markets lower.
Qatar shut production of liquefied natural gas from the world's biggest export plant after it was targeted in a military attack, driving European gas prices as much as 50% higher.
Residents in Dubai, Abu Dhabi and Doha reported hearing blasts Monday morning and Bahrain's Ministry of Interior sounded sirens on the island nation. Israeli forces announced a fresh round of strikes on Iranian-funded Hezbollah in Lebanon and there were reports of smoke above the US Embassy in Kuwait.
While the Wall Street Journal reported Iran made a fresh push to resume talks with the US, the country's national security chief, Ali Larijani, was reported by Agence-France Presse as saying Tehran was ready for a "long war."
The US reported a fourth American was killed as President Donald Trump predicted the assault could continue for the next four to five weeks. Trump told the New York Times on Sunday that it "won't be difficult" for the US and Israel to continue the bombardment, adding that America has a global weapons stockpile to keep up the strikes.
Three US F-15E Strike Eagle fighter jets crashed on Monday after being mistakenly shot down by Kuwaiti air defenses. All six aircrew ejected safely, have been recovered and are in stable condition, officials said. An investigation is under way.
S&P 500 futures slid 1.1%, with benchmarks in Asia and Europe notching similar declines. Treasury and European bond yields rose as traders scaled back wagers on interest-rate cuts in the US, UK and euro area. Safer assets were in demand as investors cut back on risk. Gold approached $5,400 an ounce. The dollar index climbed 0.7%.
Brent crude jumped 9% toward $80 a barrel as the war effectively shut the Strait of Hormuz — a vital artery off Iran's coast that carries about a fifth of the world's oil.
The UAE said its two key markets — in Abu Dhabi and Dubai — would close for the first two days of the week.
Khamenei & Succession
Trump on Saturday announced the death of Ayatollah Ali Khamenei, only the second supreme leader of Iran since the Islamic Republic's founding in 1979. ABC News reported Trump saying that most of his known would-be successors have been killed in the bombardments.
Forty-eight Iranian leaders were gone "in one shot," and the US knows how many targets are left, Trump told Fox News reporter Jacqui Heinrich, who posted his comments on X.
The US president also told the New York Times he was open to dropping sanctions on Iran if its new leader was pragmatic, both indications that Trump was planning for a scenario where the US had significant sway over the future leadership of Iran. It's not at all clear that will be the case.
Ali Khamenei, Iran's Anti-Western Supreme Leader, Is Dead
Iran Switches to Survival Mode After Killing of Khamenei
Casualties
In Iran, state media reported strikes on military and civilian sites, including one that killed over 140 people at a school in Hormozgan. More than 550 people were killed in the attacks across the country, according to Iran's Red Crescent. Islamic Revolutionary Guard Corps Commander Mohammad Pakpour and Defense Minister Aziz Nasirzadeh were among other top officials killed in the strikes.
Even Oman, which had been largely unscathed and had earlier hosted negotiations between the US and Iran, came under fire on Sunday.
Netanyahu Says Strikes on Iran to Intensify in Coming Days
Widespread Retaliation
Iran unleashed waves of missile and drone attacks against US bases and allies around the region, including in the United Arab Emirates, Qatar, Kuwait and Saudi Arabia.
Defense systems were fighting off missiles and drones from Dubai's glitzy skyscrapers and wealthy enclaves, where residents reported hearing more blasts Sunday. Centcom confirmed some "minimal" damage to US installations. Israel, which was also targeted, called up 100,000 reservists to help with the nation's defense.
In a sign of Iran's growing isolation, countries across the Gulf are stepping up their criticism of Tehran's strikes.
Ministers from the Gulf Cooperation Council held an extraordinary meeting on Sunday to consider steps to restore stability and peace in the Middle East, according to a statement from state-run Saudi Press Agency.
Saudi Arabia and the United Arab Emirates were among Gulf states that called Tehran's retaliatory strikes on them as "treacherous" and "heinous."
'Return to Your Senses': Gulf States Ramp Up Criticism of Iran
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Missiles Seen Over Abu Dhabi Financial Hub Dent Safe Haven Image
Israel Has Long Sought a US War on Iran's Regime. What's Next?
Oil and Shipping
With oil and gas shipping largely paused in the Strait of Hormuz, OPEC+ on Sunday agreed in principle to a slightly larger increase in oil production next month, delegates said.
Bloomberg Economics estimates a surge as high as $108 if the Strait of Hormuz is closed. About one-fifth of global oil flows pass through the waterway, making it a critical energy choke point.
Three ships were reportedly attacked near the mouth of the Persian Gulf, amid signs that tanker traffic through the Strait of Hormuz is halting because of conflict.
Iran's Foreign Minister Abbas Araghchi has said his country has no intention to close the Strait of Hormuz and has kept it open so far, according to an interview with Al Jazeera TV. Even so, oil and gas shipping remains largely paused in the strait.
At the same time, the world's largest shipping companies are avoiding the Persian Gulf, and DP World suspended operations at its main Dubai port.
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Oil Market's 'Worst Fears' Are Here as Gulf Conflict Hits Hormuz
More LNG Tankers Divert From Hormuz in Widening Iran Crisis
OPEC+ Agrees in Principle to Larger Oil Hike, Delegates Say
Top Shippers Cut Mideast Bookings Amid Dubai Port Suspension
Iran Crisis Threatens Worst Gas Market Disruption Since 2022
What's at Stake for Oil Markets as Trump Attacks Iran
Travel Disruptions
Airlines extended their suspension of operations, causing major disruptions at some of the world's busiest airports, but are set to send some jets into the air.
Emirates and Etihad Airways will resume limited operations as the carriers seeks to ease some of the congestion caused by the airspace closure.
Emirates will start evacuating passengers on Monday night, according to people familiar with the matter, who asked not to be identified as the move hasn't been publicly announced. While all scheduled flights remain canceled, Etihad will conduct some repositioning, cargo and repatriation flights "in coordination with UAE authorities and subject to strict operational and safety approvals," the airline said in a statement.
Qatar Airways said flights to and from Doha were suspended due to the closure of Qatari airspace extended cancellations until 2 p.m. Monday.
Several airports in the Gulf were hit in the crossfire, with Abu Dhabi Airport reporting that one person died and several were injured overnight after the emirate intercepted an Iranian drone. The main airports of Dubai, Bahrain and Kuwait were also struck.
Travel Chaos Worsens as Iran Conflict Shuts Key Mideast Airports
Travelers Trapped in Dubai See No Easy Escape From Glitzy Island
Gulf Airlines Extend Flight Cancellations as Iran Targets Hubs
Nuclear Facilities
As for the nuclear program in Iran, which is at the heart of the conflict, United Nations nuclear monitors haven't detected radiological signatures that would suggest Iranian reactors in Bushehr and Tehran have been damaged. International Atomic Energy Agency Director General Rafael Mariano Grossi said Monday in Vienna that satellite images show Iran nuclear sites were largely spared during current round of strikes.
He called for a return to diplmacy, warning the agency has lost contact with the country's atomic-safety regulator. "We are, quite understandably, feeling a strong sense of frustration," Grossi said.
US Stock Futures Drop, Oil Jumps on Iran Conflict: Markets Wrap
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Crypto Traders Hedge Iran War Risks With 24/7 Oil, Gold Trading
Hedge Funds, Banks Forced Into Contingency Mode in the UAE
Iran Strikes Expose the Dark Edge Case of Prediction-Market Era
Allies
Among NATO allies, German Chancellor Friedrich Merz was due meet Trump in Washington Tuesday in a previously scheduled visit.
Trump criticized UK Prime Minister Keir Starmer for initially blocking the US from using British military bases in its operations against Iran. "It sounds like he was worried about the legality," Trump told the Telegraph.
Diplomacy to War: How Trump's Team Decided to Attack Iran
Trump Gambles New Iran Attack Will Save Flailing MAGA Agenda
Democrats Push for War Powers Vote Over Trump Iran Strikes
World Reaction
Merz Voices Concerns About Iran Attacks Before Washington Visit
Modi Faces Backlash Over Israel Trip Days Before Iran Attacks
World Leaders Urge Swift End to Iran Crisis After Khamenei Death
Trump's Removal of Another Xi Friend Complicates Planned Summit
For Reference
The Complex History of US-Iran Relations: A Visual Timeline
How Strikes on Iran Put Focus on the Strait of Hormuz: QuickTake
What We Know About Iran's Nuclear Program: QuickTake
GLOBAL REACT: War on Iran – $108 Oil Risk as Tehran Retaliates
Flash Points - Counting the Cost of Potential Conflicts
--With assistance from María Paula Mijares Torres, Angela Cullen, Stanley James and Michelle Jamrisko.
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