Iran war enters fourth day in 'smoke and blood' as markets slide

DUBAI/TEL AVIV: Explosions tore through Tehran and Beirut on Tuesday and financial markets around the world tumbled at the prospect of a prolonged disruption to global energy supplies from the U.S.-Israeli air war against Iran.

 

Iranian drones slammed into the U.S. embassy in Saudi ​Arabia, causing minor damage and starting a fire, after previously hitting the mission in Kuwait. Washington responded by shutting those missions and ordering non-emergency government personnel and their families to leave countries across the Middle East.

 

A ‌day after President Donald Trump and Prime Minister Benjamin Netanyahu gave open-ended answers when asked how long the war would last, a source told Reuters that Israel's campaign had been planned to last two weeks and was moving faster than expected.

 

The source, familiar with Israel's war plan, said its aim was to overthrow Iran's clerical rulers, and there was no firm deadline to achieve it.

 

But the Israeli military was going through its target list faster than planned, with early success killing Iran's leaders and taking out its defences, the source said. Israel was also accelerating its campaign out of concern ​that Washington might agree with Iran's surviving leaders to stop before Israel's objectives were realised, the source added.

Inside Iran, Israel struck the Tehran headquarters of the state broadcaster IRIB. Residents have jammed highways to flee cities as the bombs ​have fallen.

 

“How long will this continue? Where are the shelters? Where is the government?” Bijan, 32, a bank employee, told Reuters by telephone from Tehran.

 

“Every night my wife and I hide ⁠in the basement. The whole city is empty. There is smoke and blood everywhere.”

 

Global markets slid as the disruption of Middle East energy supplies threatened to reignite post-pandemic inflation. The price of crude oil was up by 15% in two days, and the ​European wholesale price for natural gas was up a punishing 40%.

 

Europe's benchmark STOXX 600 index (.STOXX), opens new tab fell 3% in early trading, after a 1.7% drop on Monday. Shares in energy import-dependent South Korea plunged more than 7%. A 2% fall in U.S. stock futures ​suggested the selloff was headed for Wall Street.