Long-standing tensions in the Middle East are no longer simmering beneath the surface; they have evolved into a multi-front conflict not seen in the region since the Six-Day War of 1967, with Iran at the center of the escalation. US and Israeli forces are conducting an ongoing campaign against Iranian territory, leadership infrastructure, and militia assets across active fronts. Yet Iran and its network of militias continue to respond — from missile launches to disruptions in maritime navigation — even as they suffer significant losses and declining operational capabilities.

In Washington, US President Donald Trump has outlined four clear objectives for the war against Iran, with the current campaign expected to last about four weeks. Iran, however, has a different vision. The real question now is how this escalation cycle will evolve and what impact it may have on energy markets.

At the beginning of the conflict, Trump clearly stated the four goals he seeks to achieve through US actions against Iran and its militias. As listed, they begin with preventing Iran from building a nuclear arsenal, followed by undermining and destroying its missile stockpiles and production capabilities. Next comes regime change, and finally ending the financing and arming of its militias. Every member of his cabinet has endorsed these objectives.

Beyond the US war goals, most analysts have overlooked that many of these objectives were included in the initial version of the nuclear agreement between Barack Obama and Iran, known as the Joint Comprehensive Plan of Action (JCPOA) negotiated between 2013 and 2015. The exception was the explicit term “regime change,” although this was implicitly embedded in measures aimed at dismantling the key mechanisms the Islamic Revolutionary Guard Corps (IRGC) used to fund itself and its militias. The IRGC is the primary organization tasked with protecting the principles of the 1979 Islamic Revolution domestically and expanding them through its militia networks.

The core mechanism for restricting funding involved forcing Iran to comply with the requirements of the Financial Action Task Force (FATF). The US objective was to neutralize the IRGC in a way that would eventually allow it to be merged into Iran’s regular military, known as the Artesh, as outlined in the author’s recent book on the new global order of oil markets. Many of these provisions were removed from the final JCPOA before it was signed on July 14, 2015. When Trump decided to withdraw unilaterally from the JCPOA in 2018, he cited the original Obama draft as a foundation for renegotiation.

Trump therefore made it clear that regime change is one of the four main objectives — something Iran’s leadership and the IRGC had understood from the outset. Given the existential nature of the conflict, the chances of reaching a meaningful negotiated settlement between the Islamic Republic and the IRGC on one side and the United States and Israel on the other remain extremely slim.

David Petraeus, the former US general and CIA director, confirmed that the death of former Supreme Leader Ali Khamenei and several senior IRGC commanders does not undermine the operational continuity of the Islamic Republic or the forces that protect the regime. He pointed out that a highly organized and armed structure of roughly one million personnel remains in place, including about 200,000 members of the Basij militia, 200,000 in the national police and IRGC units, and roughly 400,000 troops in Iran’s regular army (Artesh), making control of Iran extraordinarily difficult.

Moreover, any potential regime change lacks a credible alternative leadership. Reza Pahlavi, the exiled son of the former shah who resides in the United States, has limited support inside Iran.

According to a European security source close to the European Union, the broader strategy of the IRGC is to continue “stinging” the United States and Israel through sustained attacks until both countries conclude they have achieved enough objectives to withdraw, even without regime change. This strategy includes maintaining an effective closure of major oil and liquefied natural gas routes through the Strait of Hormuz and the Bab el-Mandeb Strait.

Although the Trump administration has proposed a plan to secure the Strait of Hormuz — through which roughly one-third of the world’s oil and about one-fifth of global LNG pass — there is still no timeline for ensuring safe passage for oil tankers. Just last year, the IRGC completed military preparations to close the strait if necessary using anti-ship missiles, fast attack boats, and naval minefields in the Persian Gulf. It also conducted exercises using “swarm attack” tactics with drones and vessels, according to the European source. Similar weapons could be used to disrupt shipping near the Bab el-Mandeb Strait, which connects the western coast of Yemen — controlled by Iranian-backed Houthi militias — with the eastern shores of Djibouti and Eritrea before entering the Red Sea.

In addition to these measures, Iran is expected to intensify attacks against US allies in the region, particularly Saudi Arabia. Last week saw several drone attacks targeting the Ras Tanura refinery — Saudi Arabia’s largest refinery with a capacity of about 550,000 barrels per day. Most of the drones were intercepted, and the refinery was temporarily shut as a precaution. The facility and others are likely to remain targets for future strikes in an effort to replicate the massive impact of the 2019 Houthi attacks on Saudi Arabia’s Abqaiq and Khurais facilities, which at the time represented about 50% of Saudi oil production or roughly 5% of global supply. Those attacks triggered an immediate spike in global oil prices of up to 20% and were among the most significant assaults on energy infrastructure in modern history.

The European source added that Iran’s military operations, measured on a scale from zero to nine in terms of overall capability, have not yet exceeded level two.

Rising oil prices also have a direct and potentially damaging effect on the US economy and the president’s political ambitions, a factor likely to weigh on Trump’s calculations as the November 3 midterm elections approach. According to the World Bank, a “small disruption” in global oil supply — between 500,000 and 2 million barrels per day — could raise prices by 3–13%. A “moderate disruption” of 3 to 5 million barrels per day could increase prices by 21–35%. A “major disruption” of 6 to 8 million barrels per day, similar to the 1973 oil crisis, could push prices up by 56–75%.

Aluminum prices declined on Tuesday, pressured by profit-taking after comments from US President Donald Trump suggesting the war in the Middle East could end quickly eased concerns about supply disruptions.

The benchmark three-month aluminum contract on the London Metal Exchange fell 1.2% to $3,343 per metric ton as of 10:30 GMT.

The contract had touched its highest level since March 2022 at $3,544 on Monday amid growing fears that more smelters in the Gulf could shut down due to the inability to ship through the Strait of Hormuz.

Later on Monday, Trump predicted a swift end to the conflict with Iran while warning that he would escalate military operations if Tehran attempted to block oil shipments.

Aluminum had earlier dropped as much as 3.5% during Tuesday’s session.

Nitesh Shah, commodities strategist at WisdomTree, said: “I’m not sure everyone fully appreciates how difficult it is to restart an aluminum smelter once it has been shut down. It takes time, and that comes at a moment when aluminum markets are already relatively tight.” He added: “I don’t see aluminum prices collapsing quickly, especially since the very small surplus expected in 2026 is now likely to turn into a deficit.”

In Asia, where spot aluminum premiums have risen, a request was issued to withdraw 98,150 tons of aluminum from London Metal Exchange warehouses in Port Klang, Malaysia, indicating traders are seeking to profit from the metal shortage. The amount represents 21.7% of the aluminum currently held in the LME warehouse system.

Meanwhile, copper prices rose 1.2% to $13,103.50 per ton. Shah said: “Any sign of easing tensions could boost optimism about cyclical conditions, which is why copper is seeing support today.” Data also showed that China’s copper imports fell 16.1% during the first two months of the year.

Zinc was the biggest gainer, rising 1.3% to $3,370 due to higher electricity prices, while nickel was little changed with a slight increase of 0.2% to $17,515. Lead added 0.1% to $1,938.50, while tin fell 0.8% to $50,030.

The cryptocurrency market is experiencing a fresh wave of buying momentum today after Bitcoin reclaimed the $70,000 level, marking one of its strongest daily recoveries this week. The rise in digital assets comes as early signs emerge of improving global economic conditions.

Brent crude had recently surged due to geopolitical tensions but has now fallen below $85 per barrel, easing inflation concerns that had been weighing on financial markets.

As oil prices decline, high-risk assets across global markets have begun to stabilize. Bitcoin quickly followed this trend, rebounding from an intraday low near $67,000 before climbing back toward the $70,000 zone. For traders, this move highlights the growing link between digital assets and global macroeconomic trends.

Why falling oil prices affect cryptocurrencies

Oil prices play a key role in shaping global inflation expectations and investor confidence. When energy prices rise sharply, concerns about inflation typically increase, prompting central banks to maintain tighter monetary policies and reducing liquidity in financial markets.

Under such conditions, risk-sensitive assets such as cryptocurrencies often struggle to generate gains.

However, the recent decline in oil prices may signal the opposite dynamic. With Brent crude falling below $85 per barrel, inflationary pressures may begin to ease, potentially improving investor confidence and boosting demand for risk assets such as technology stocks and cryptocurrencies.

Historically, periods of falling commodity prices have often coincided with renewed momentum in digital asset markets.

Bitcoin outlook and key levels

Bitcoin’s recovery above $70,000 represents an important development in the market, as the level serves as a key psychological barrier for traders. Reclaiming this threshold suggests buyers are attempting to regain control after several sessions of sideways movement.

If bullish momentum continues, analysts believe Bitcoin could soon test the resistance zone between $72,000 and $74,000, an area that previously capped price gains. A breakout above this range could open the door toward $75,000, a major upside target in the current market structure.

On the downside, the $68,000 level remains an important support zone. Holding above this level would keep the broader bullish trend intact in the near term.

Altcoins stabilize as market sentiment improves

The improvement in Bitcoin’s price has already begun to influence the broader cryptocurrency market, with several altcoins stabilizing after a period of volatility, indicating a relative improvement in investor sentiment.

Traders say that easing economic pressures from the oil market have helped reduce risk aversion toward digital assets. While uncertainty still persists across global markets, declining energy prices could provide temporary support for cryptocurrencies if the trend continues.

Outlook for the cryptocurrency market

For now, the digital asset market appears to be responding positively to improving macroeconomic indicators. Sustained trading above the $70,000 level could strengthen bullish sentiment, while continued weakness in oil prices may help ease inflation concerns.

Traders are likely to keep a close watch on broader economic indicators and key technical levels, as these factors are playing an increasingly important role in shaping the direction of the cryptocurrency market. Analysts believe the next few sessions could determine whether Bitcoin’s latest recovery evolves into a broader market rally.

Oil prices fell more than 5% on Tuesday after reaching their highest levels in more than three years in the previous session, following comments from US President Donald Trump suggesting the war in the Middle East could end soon, easing concerns about prolonged disruptions to oil supplies.

Brent crude futures dropped $6.64, or 6.7%, to $92.32 per barrel by 12:02 GMT. US West Texas Intermediate crude fell $5.44, or 5.7%, to $89.33 per barrel, after both benchmarks had declined by as much as 11% earlier in the session.

Trading volumes in Brent futures fell to about 284,000 contracts, the lowest since February 27, before the war launched by the United States and Israel against Iran began. Trading volumes in West Texas Intermediate also declined to 255,000 contracts, the lowest since February 20.

Oil prices had surged on Monday to more than $119 per barrel, the highest level since mid-2022, after supply cuts from Saudi Arabia and other producers raised fears of major disruptions in global supply.

Prices later pulled back following a phone call between Russian President Vladimir Putin and US President Donald Trump, during which Putin proposed ideas aimed at reaching a rapid settlement to the war, according to a Kremlin aide. The conversation helped ease concerns about oil supplies.

Trump said on Monday in an interview with CBS News that he believes the war against Iran is “almost over,” adding that Washington is now “far ahead” of the original timeline, which he had initially estimated at four to five weeks.

Suvro Sarkar, head of the energy sector team at DBS Bank, said: “It’s clear that Trump’s comments about a shorter war duration calmed the markets. Just as there was an exaggerated reaction upward yesterday, we believe there is an exaggerated reaction downward today.”

He added that the market may be underestimating risks at current Brent levels, noting that Murban and Dubai crude are still trading above $100 per barrel, indicating that the underlying supply situation has not changed significantly.

In response to Trump’s remarks, Iran’s Revolutionary Guard said it would be the one to “determine the end of the war,” adding that Tehran will not allow “a single liter of oil” to be exported from the region if US and Israeli attacks continue, according to state media reports on Tuesday.

At the same time, Trump is considering easing oil sanctions on Russia and releasing emergency oil reserves as part of a package of options aimed at curbing the sharp rise in prices, according to multiple sources.

Priyanka Sachdeva, analyst at Phillip Nova, said in a note that discussions about easing sanctions on Russian oil, along with Trump’s remarks suggesting possible de-escalation and the potential use of strategic oil reserves by the Group of Seven, all point to one message: oil supplies are likely to keep reaching markets in some form.

She added: “Once traders felt supply routes could remain open, the panic premium that pushed prices above $100 yesterday began to fade, and oil prices quickly pulled back.”

Saudi Aramco, the world’s largest oil exporter, warned that the continuation of the war with Iran and disruptions to shipping in the Strait of Hormuz could lead to “catastrophic consequences” for global oil markets.

JPMorgan said in a note that political measures may have limited impact on oil prices unless safe passage through the Strait of Hormuz is guaranteed, given the potential loss of up to 12 million barrels per day of supply over the next two weeks.

Goldman Sachs said it will not change its oil price forecasts for now due to ongoing uncertainty, expecting Brent crude to average $66 per barrel in the fourth quarter and West Texas Intermediate to average $62.

Energy ministers from the Group of Seven are scheduled to discuss ways to address rising energy prices caused by the war in Iran during a call on Tuesday, while European Union leaders will also hold a meeting later the same day to discuss the issue.