- US President Trump said the war with Iran may be short-lived despite new hard-line leader
- Trump threatened intensified action if Iran tries to stop global oil supply, causing market swings
- Iran's new supreme leader Mojtaba Khamenei is less compromising and linked to Revolutionary Guard
US President Donald Trump said on Tuesday that the war against Iran may be short-lived despite the country's selection of a new hard-line supreme leader to oversee the fight for the Islamic theocracy's survival.
But moments later, Trump hinted during a news conference that the worst fighting could still be ahead as he threatened intensified action if Iran made any "attempt to stop the globe's oil supply". The back-and-forth sent oil prices and stock markets seesawing.
"We are putting an end to all of this threat once and for all, and the result will be lower oil prices, oil and gas prices for American families," Trump said.
The war has choked off major supplies of oil and gas to world markets and sent fuel prices rising across the US. The fighting has also led foreigners to flee from business hubs and prompted millions to seek shelter as bombs hit sites including military bases, government buildings, oil and water installations, hotels and at least one school.
The selection of hard-line Ayatollah Mojtaba Khamenei to succeed his late father as Iran's supreme leader sent oil prices surging and markets sliding. Investors saw it as a signal that Iran was digging in 10 days into the war launched by the United States and Israel.
Oil prices later fell, and the US stock market closed higher after Trump told a group of lawmakers at his golf club near Miami that the conflict may end soon.
"We took a little excursion" to the Middle East "to get rid of some evil. And, I think you will see it is going to be a short-term excursion", Trump said.
Trump also had a call on Monday with Russian President Vladimir Putin to discuss the war and other issues. Putin's foreign affairs adviser, Yuri Ushakov, said Putin "voiced a few ideas regarding a quick political and diplomatic settlement" of the conflict following his conversations with Gulf leaders and Iranian President Masoud Pezeshkian.
Khamenei, a secretive 56-year-old cleric, is only the third supreme leader in the history of the Islamic Republic. He has close ties to the paramilitary Revolutionary Guard, which has been firing missiles and drones at Israel and Gulf Arab states since his father, Ayatollah Ali Khamenei, who had ruled since 1989, was killed during the war's opening salvo.
Multiple strikes shake Tehran
More than 20 heavy explosions were heard in Tehran in what was considered the heaviest air raid on the capital since the war started on February 28. Iranian media did not report on damages and casualties.
Israel said on Monday that it was carrying out "a wide-scale wave of strikes" on the Iranian city of Isfahan, as well as Tehran and in southern Iran. The Israeli military said it hit dozens of infrastructure sites, including the drone headquarters of the Revolutionary Guard.
Meanwhile, Israel's military said more missiles had been launched from Iran toward Israel late on Monday.
Trump said the United States was nearing its goal to eliminate Iran's ballistic-missile stockpile and its ability to produce and launch them. The administration has offered shifting rationales and timelines since the start of the conflict.
He also talked about "building a new country", a comment that seemed to suggest the US might be engaged in the building of a new Iran.
Trump says he likes idea of another 'internal' candidate to lead Iran
Thousands poured into a central square in the capital, Tehran, and other locations in a show of allegiance to the new supreme leader, waving flags and shouting phrases like "Death to America" and "Death to Israel".
The younger Khamenei, who has not been seen in public since the war started, was long considered a potential successor -- even before the killing of his 86-year-old father.
Trump told reporters that he was "disappointed" that Mojtaba Khamenei was picked and that he liked "the idea" of a leader drawn from an "internal" group of candidates, saying that this process "works well" with Venezuela's new leader, Delcy Rodriguez.
The younger Khamenei is seen as even less compromising than his late father. As supreme leader, he has the final say on all major policies, including Tehran's disputed nuclear programme.
Though Iran's key nuclear sites are in tatters after the US bombed them during the 12-day Israel-Iran war in June, it still has highly-enriched uranium that is a technical step away from weapons-grade levels. Khamenei could choose to do what his father never did -- build a nuclear bomb.
Trump told reporters the war with Iran started because that country was starting work on a new site for developing material for nuclear weapons to replace one bombed last year by the US.
Israel has already described Khamenei as a potential target. Trump said on Monday it "would be inappropriate" to say whether he would be targeted.
US market seesaws over uncertainty of war
The US stock market careened through a manic Monday, going from a steep early loss to a solid gain as worries turned into hope that the war with Iran may not last that long. Oil prices whipped from nearly USD 120 per barrel, the highest since 2022, back toward $90.
Iran's attacks in the Strait of Hormuz have all but stopped tankers from using the shipping lane through which a fifth of the world's oil is carried, and Iranian drones and missiles have targeted oil and gas infrastructure in major producers. Attacks on merchant ships near the strait have killed at least seven mariners, according to the International Maritime Organisation.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.