• U.S. and Israeli forces continue large-scale combat operations in Iran, achieving air superiority over Tehran and targeting over 2,000 sites, including Revolutionary Guard facilities and potential successor leaders, following the death of Supreme Leader Ayatollah Ali Khamenei.
  • Iranian retaliatory strikes with missiles and drones have killed at least four U.S. service members, disrupted air travel across the Gulf, and prompted OPEC+ to pledge output hikes as oil prices surge amid market volatility.
  • President Trump has stated operations are "ahead of schedule," declined to rule out ground troops, and called for an Iranian military uprising, with no diplomatic off-ramp in sight as a potentially harder-line regime emerges.

U.S.-led airstrikes on Iran entered their third day on March 2, with combat operations intensifying and regional fallout spreading, according to people familiar with the matter. The strikes, which began on February 28, have killed Supreme Leader Ayatollah Ali Khamenei and targeted more than 2,000 sites, including air defenses and facilities linked to the Islamic Revolutionary Guard Corps, in an effort to eliminate threats and prevent nuclear armament. President Trump confirmed Khamenei's death in statements on March 1-2, adding that objectives like regime capitulation remain unmet and operations will continue until they are achieved, estimating a timeline of "four weeks or less."

Efforts to degrade Iran's military capabilities have hit a snag, however, as Iranian forces launched retaliatory missile and drone strikes on U.S. bases in Kuwait, Bahrain, Qatar, the UAE, and Iraq, as well as vessels in the Indian Ocean. One strike hit the U.S. Embassy in Kuwait, while friendly fire downed three U.S. F-15s, though crews were reported safe. The attacks have killed at least four U.S. service members, with more casualties expected, and shattered the image of Gulf stability, forcing shelter-in-place orders in affected areas. Airspace closures in Jordan, Kuwait, and other Gulf hubs have stranded tens of thousands of travelers, snarling commerce and prompting evacuation delays as U.S. priorities shift to military operations.

Without a deal or de-escalation, the conflict risks pulling in wider regional actors. Hezbollah has fired rockets from Lebanon, leading Israel to intensify its coordination with U.S. forces, while militias have attacked U.S. troops in Iraq and drones hit UK and French bases. Trump has called for an Iranian military uprising, offering immunity to defectors, and declined to rule out ground troops, signaling persistence for regime collapse. "What we're seeing is a concerted push to decapitate the Iranian leadership," said one analyst, speaking on condition of anonymity due to the sensitivity of the matter. Attempts to reach Iranian officials for comment were unsuccessful, with the regime vowing no capitulation and refusing negotiations.

Global markets reacted sharply to the unfolding crisis, with stocks falling, oil surging, and gold and the dollar rising as safe havens. OPEC+ has pledged April output hikes to offset disruptions, but volatility persists as traders weigh the risk of prolonged conflict. The International Atomic Energy Agency has urged diplomacy amid concerns over nuclear material risks near strike sites, warning of potential radiological incidents that could require major city-scale evacuations. Parallel developments include the Pentagon confirming ongoing operations and Bloomberg noting market ties to oil price swings, with experts seeing no immediate off-ramp and a potential hardliner takeover in Iran accelerating nuclear pursuits.

Correction: An earlier version of this article misstated the number of U.S. F-15s downed; it was three, not two.