As of March 2, 2026, the conflict involving Iran has escalated into a direct and unprecedented war following a massive joint U.S.-Israeli military campaign launched on February 28, 2026. This operation, codenamed Operation Epic Fury, has significantly altered the regional balance of power, resulting in the reported death of Iran’s Supreme Leader, Ayatollah Ali Khamenei. The United States and Israel launched a large-scale military offensive against Iran on February 28, 2026, primarily to prevent the country from obtaining nuclear weapons and to dismantle its military infrastructure. The operation, which the U.S. has dubbed Operation Epic Fury, followed the collapse of diplomatic negotiations aimed at curtailing Iran’s nuclear and ballistic missile programs. Experts note that while Iran’s leadership has been decapitated, the regime’s extreme resilience and its “forever war” strategy—involving asymmetric economic warfare and regional destabilization—could lead to a prolonged conflict with historic global trade implications.
Objectives of the attack on Iran
According to statements from U.S. President Donald Trump and Israeli Prime Minister Benjamin Netanyahu, the attack has several key goals:
- Nuclear Prevention: To permanently destroy Iran’s capacity to develop nuclear weapons.
- Missile Destruction: To raze Iran’s ballistic missile industry and manufacturing capabilities.
- Naval Neutralization: To annihilate the Iranian navy and its command facilities.
- Regional Security: To eliminate what officials described as “imminent threats” and to stop Iran from funding and directing armed groups outside its borders.
- Regime Decapitation: High-value strikes successfully targeted the Supreme Leader and senior military officials to force a government collapse or capitulation.
- Nuclear Neutralization: Strikes aimed to dismantle Iran’s nuclear infrastructure, which Israel and the U.S. claim was nearing weaponization.
- Military Degradation: Focused attacks on ballistic missile production, air defense systems (specifically the S-300), and the IRGC Navy.
Impact of the US/Isreal attack on Iran
- Leadership Targeted: Initial strikes successfully targeted senior Iranian officials, including Supreme Leader Ayatollah Ali Khamenei, who was confirmed killed in his Tehran compound.
- Regime Change: Both leaders have explicitly encouraged the Iranian people to use the military action as an opportunity to “take over” their government.
- Civilian and Military Toll: As of March 2, 2026, the Iranian Red Crescent reports that 555 people have been killed across 130 locations, including a high-casualty strike on a school in southern Iran.
- Iranian Retaliation: Iran has responded by launching hundreds of drones and ballistic missiles at Israel and U.S. military facilities in Bahrain, Kuwait, Qatar, and the UAE.
Regional and Global Impact
- Energy Crisis: Global oil prices surged 10% immediately, while gas prices spiked 50% after Qatar halted LNG production due to the hostilities.
- Shipping Disruptions: Iran has warned against transiting the Strait of Hormuz, a chokepoint for 20% of the world’s oil and gas.
- US Casualties: Three American service members were killed in a strike on a base in Kuwait.
- Axis of Resistance: Iran’s regional proxy network (Hezbollah, Hamas, and the Houthis) is under extreme duress following the fall of the Assad regime in Syria in late 2024 and sustained Israeli operations in Lebanon and Gaza.
- Travel Ban: With much of the region’s airspace closed and airlines forced to cancel flights through multiple cities, thousands of travelers have been left stranded.
Days after the US and Israel first launched strikes against Iran, the conflict is widening by the hour, drawing in other countries across the region, sparking fears for the global economy and leaving thousands of travelers stranded. By Monday, retaliatory strikes launched from Iran had shattered any sense of security that its Persian Gulf neighbors have enjoyed for decades, killing at least 20 people, including six US service members, across the region and in Israel. Meanwhile, US President Donald Trump embarked on a series of media interviews, telling several outlets, including CNN, that he thought the conflict with Iran would last “four weeks,” the clearest indication yet of how long the administration anticipates the campaign could continue.
Speaking Monday at the Pentagon, Gen. Dan Caine, chairman of the Joint Chiefs of Staff, emphasized that this was not a “single, overnight operation” and that more US losses should be expected. Trump struck a similar note, telling CNN’s Jake Tapper that the “big wave hasn’t even happened, the big one is coming soon,” without offering further detail.
Why did the US and Israel attack?
CNN’s Issy Ronald explained that both Trump and Israeli Prime Minister Benjamin Netanyahu said their main objectives were to defend their respective countries from imminent threats posed by Iran, most notably, to prevent the Islamic regime from acquiring a nuclear weapon, without providing any evidence that it was any closer to obtaining one. That claim was undercut by Pentagon briefers who acknowledged to congressional staff Sunday that Tehran was not planning to attack US forces or bases in the region unless Israel attacked first. Such uncertainty over precisely what the strikes aim to accomplish continued even after Trump gave interviews to several media outlets Sunday night. He outlined various possible scenarios to the New York Times, suggesting that a repeat of events in Venezuela — where US forces seized the country’s president, Nicolás Maduro, and accepted his deputy Delcy Rodríguez as a substitute leader — would be a “perfect scenario.” At the same time, he said he hoped the Islamic Revolutionary Guard Corps “would really surrender to the people.” In his first in-person remarks to reporters since the operation began, Trump said Monday that Iran had ignored the White House’s demands not to rebuild its nuclear program. He said the joint operation launched by the US and Israel was the “best chance” to “eliminate the intolerable threats posed by this sick and sinister regime.”
US Defense Secretary Pete Hegseth insisted Monday “this is not a so-called regime change war,” adding that the US has no intention of being caught in the same nation-building quagmire as in Iraq. Instead, he said, the US was aiming to “destroy the missile threat, destroy the navy, no nukes.” Since the turn of the year, Iran has been battling an economic crisis that sparked nationwide protests. As a crackdown left thousands of protesters dead, Trump promised to come to their aid, saying the US was “locked and loaded.” Israeli and American intelligence agencies — including the CIA — had been tracking Khamenei’s movements for months, waiting for the moment to strike, even while US envoys were engaged in regular talks with Iran over a new nuclear deal.
The 2026 Iran war, an initial take and implications
According to Dan Alamariu, Chief Geopolitical Strategist – Alpine Macro, Unlike the 2025 12-Day War, this conflict is larger, more intense, and likely to last one to three weeks, at most two months.
What you will learn in this report:
- The U.S. and Israel launched joint strikes on Iran on February 28. The war fears are being priced in quickly as the week starts: oil prices spiked materially from February 27 through the March 1 market open.
- Iran cannot win, but disrupting Gulf oil flows could inflict material economic damage and market volatility.
- Oil, gas, out-of-region energy stocks, gold, and aerospace & defense will likely spike. Sell any extreme moves; these will fade as the conflict will not last beyond two months.
- If GCC, East Asian, or European assets fall sharply on war fears, buy the dip.
History of Iran’s Nuclear Program
Iran has pursued a nuclear program since at least 1957, with varying degrees of success. During a war with Iraq, Iran decided to develop nuclear weapons to ensure its security in the late 1980s. Consequently, Iran pursued agreements with China and Russia to support the program’s research throughout the 1990s. In the summer of 2002, the National Council of Resistance of Iran, an umbrella organization made up of Iranian dissident groups, exposed the existence of two Iranian nuclear sites that were hidden from the IAEA.
By 2003, diplomats launched an intensive effort to halt Iran’s nuclear program. Iran agreed, insisting only on keeping its centrifuges for nuclear energy. However, it did not follow through on its commitment to transparent reporting to the IAEA and continued covert activities, leading to a June 2004 rebuke and a September 2005 finding of non-compliance by the IAEA, paving the way for a future referral to the UN Security Council (UNSC). In 2006, the UNSC adopted Resolution 1696, the first legally binding call for Iran to suspend its uranium enrichment program. Over the next few years, the UNSC adopted a series of resolutions imposing crippling economic sanctions on Iran for its failure to suspend its enrichment-related activities.
Between 2011 and 2015, the compounding effects of international sanctions led Iran’s economy to contract by 20 percent and unemployment to rise to 20 percent. In 2013, Hassan Rouhani, a noted pragmatist, won Iran’s presidential election, campaigning on a promise to lift sanctions and restore the economy. Over the next two years, the United States convened several rounds of bilateral talks and led the other P5+1 coalition members—China, France, Germany, Russia, and the United Kingdom—in negotiations with Iran’s new leadership. These efforts culminated in the adoption of the Joint Comprehensive Plan of Action (JCPOA) in 2015. Once key parties signed the agreement, the UNSC approved UN Resolution 2231, paving the way for sanctions relief.
The JCPOA required Iran to reduce its stockpile of enriched uranium by 98 percent for fifteen years, cut the number of operating centrifuges by two-thirds for ten years, and provide inspectors access to enrichment facilities within twenty-four days if the IAEA suspects violations. Moreover, if the IAEA confirmed violations, the JCPOA allowed for the immediate reinstatement of sanctions. After the JCPOA entered into force on January 16, 2016, Iran received sanctions relief totaling nearly $100 billion. However, Iran continued to develop ballistic missiles, which, according to the United States, violated UN Resolution 2231. (Center for Preventive Action).
How has Iran responded?
Iran has launched ballistic missiles and drones at Israel, several Middle Eastern countries with links to the US, a British military base in Cyprus and ships off the Iranian coast. The IRGC said it had targeted Israeli government and military sites in Tel Aviv and elsewhere, while nine people were killed when a residential area in Beit Shemesh was hit. The UK Ministry of Defence (MoD) has confirmed a drone had struck the British Akrotiri base in Cyprus. No one was killed or injured in the attack but the MoD said some people were being moved off the RAF base. Qatar, Bahrain, Jordan, the United Arab Emirates and Kuwait – all home to US military bases – have been targeted, as have Oman and Saudi Arabia. More strikes were heard across the Gulf on Monday, including in the cities of Dubai, Doha and Manama. Iran’s military said it had used 15 cruise missiles in attacks on a US airbase in Kuwait and vessels in the Indian ocean. Civilian sites, including hotels in Dubai, have been struck as well as military installations.
How is the war affecting the economy and energy prices?
Instability in the Middle East has begun to impact the global economy, particularly because of the targeting of the Gulf’s critical energy industry. Qatar’s state-run energy firm said it had halted liquefied natural gas production because of Iranian attacks, causing a 50% spike in gas prices on Monday. Iranian drones attacked the Ras Tanura refinery in Saudi Arabia, causing a partial shutdown, the country’s energy ministry said on Monday. Iran warned vessels not to pass through the Strait of Hormuz, a major shipping channel through which about 20% of the world’s oil and gas is shipped. There has been a 10% surge in the global price of oil – sparking fears of petrol prices rising and wider knock-on effects for the international economy.
Professor Atanga D. Funwie
President & CEO
Kesmonds Group / Kesmonds International University.
