Main developments
Oil prices have jumped above $100 a barrel for the first time since August 2022.
Iran’s senior clergy have chosen Ayatollah Mojtaba Khamenei, the second son of the slain supreme leader, as his father’s successor.
US stock market futures tumbled in early trading in Asia on Monday.
Iran continued attacks on neighbouring countries. A drone damaged a water desalination plant in Bahrain and a missile salvo injured five people in central Israel.
The US announced its seventh military casualty in the conflict, while Israel confirmed the deaths of two soldiers, its first military fatalities.
Mojtaba Khamenei’s appointment signals Iran’s hardline policies will continue
Iran’s top clerics’ choice of Mojtaba Khamenei, the son of the slain supreme leader, as his father’s successor signals the Islamic republic is likely to maintain its hardline policies towards the US, Israel and the west.
Some Iranian analysts had thought the regime would hold off announcing a new supreme leader until after the war ended, as Khamenei is now likely to be a target for US and Israeli strikes.
But his appointment is likely to be viewed as an act of defiance against US President Donald Trump, who this week described Khamenei as a “lightweight”.
Read more about the choice here.
Trump says oil prices are a ‘very small price to pay’
Donald Trump has dismissed the surge in oil prices as a “very small price to pay” in a social media post on Sunday, even as US gasoline futures shot higher.
In a post on Truth Social on Sunday evening, Trump said: “Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace.”
His comments came as front-month gasoline futures increased 12 per cent on Sunday. They are up 80 per cent since the beginning of the year. The wholesale price increases are likely to raise costs for US drivers at the gas pump.
The US war with Iran has already triggered higher gas prices. Last week, the national average for a gallon of regular gasoline jumped nearly 27 cents to $3.25, according to the motor club AAA.
Trump campaigned heavily in 2024 on his pledge to lower inflation and energy prices, and had been touting his efforts to bring down petrol costs since returning to office in January 2025.