Updates with details throughout
Israel continued to attack nuclear facilities in Iran and Tehran retaliated with missile strikes against Tel Aviv and elsewhere in Israel on a day that saw sharp escalation across the world's largest oil producing region.
Israel's Air Force said today it completed another round of attacks against Iran while prime minister Benjamin Netanyahu said his country will continue attacking Iran "as long as necessary". The latest Israeli attack, following broader strikes in the early hours Friday, targeted a nuclear facility near Isfahan in Iran's northwest, according to Israel's Air Force post on social media platform X at 8:40pm local time (5:40pm GMT).
A barrage of Iranian ballistic missiles landed in Tel Aviv in late evening hours Friday local time, as Iran's Islamic Revolutionary Guards Corps (IRGC) said it will deliver a "crushing and precise response" to Israeli strikes that decapitated Iran's military leadership, knocked out the country's air defense and caused some damage to the country's nuclear programme facilities.
The exchange of air and missile strikes has so far spared oil infrastructure in Iran and elsewhere in the region.
Israel has halted production at two of its major natural gas fields and cut pipeline exports to Egypt following the attack on Iran.
Crude market participants said they were concerned that Israeli attacks on Iran could extend beyond the existing military targets and nuclear infrastructure, and target the country's oil fields and facilities.
The July Nymex WTI contract was trading near $73/bl at 3pm ET, about 8pc above yesterday's settlement price.
Israel's military said earlier in the day that it intercepted a barrage of drones launched from Iran and Yemen. The ballistic missiles Iran used later in the evening are faster moving and harder to intercept, said former US assistant secretary of state Barbara Leaf. Iran last used them to attack Israel in October 2024.
"We must give a strong response," Iran's supreme leader, Ayatollah Ali Khamenei said before the Iranian missile strikes on Israel. "They shouldn't imagine that they've attacked us and that everything is over now."
What next?
The immediate aftermath of the attack on Iran, launched in the early hours Friday local time, points to a serious toll in leadership ranks, including the Islamic Revolutionary Guards Corps commander-in-chief Hossein Salami and Iran's army chief, Mohammad Bagheri.
US president Donald Trump convened a national security council meeting at 11am ET today, with no readout yet on any potential measures it could take in response to a hike in oil prices.
US forces across the Middle East are on alert and the US administration pledged to help defend Israel from further attacks.
The conflict has the potential to spread to neighboring countries and Trump's sidelining or forced retirement of professional diplomats at the State Department and the White House national security council leaves his administration with fewer resources to dial down tensions or to prevent Israel from taking drastic steps, Leaf said during a discussion hosted by think tank the Middle East Institute.
"Iraq is in the bull's eye," said Leaf, who left the State Department in January. "The Gulf states are obviously very vulnerable. Egypt and Israel have been acutely threatened by the conflict in Gaza, and this kind of adds a new pile on, but I worry about Iraq."
The apparent initial success of Israel's military operation could prompt Netanyahu to press his advantage against Iran and "one of my concerns would be that... the drive to go forward toward regime change will be just too tempting," Leaf said.
"This is a country of 83 million people. It's not a non-state actor like Hezbollah" in Lebanon, she said. "As immense an achievement it was for the Israel Defense Forces to take Hezbollah apart, it is not the same thing as really decapitating a country and then seeing how it all works out."
