Trump vows to 'avenge' the deaths of U.S. service members, says combat operations continue

The Dubai Financial Services Authority said it will temporarily suspend trading on Nasdaq Dubai on Monday and Tuesday.

The regulator said it will continue to monitor regional developments and remains in close coordination with local authorities and relevant advisory bodies.

Nasdaq Dubai, based in the Dubai International Financial Centre, facilitates trading in equities, derivatives, sukuk and conventional bonds for regional and global investors.

— Lee Ying Shan

The United Arab Emirates recalled its ambassador from Iran Monday and shuttered its embassy in Tehran in response to missile strikes over the weekend that it said targeted civilian infrastructure, including Jebel Ali Port and airports in Dubai and Abu Dhabi.

The UAE Ministry of Foreign Affairs also summoned the Iranian Ambassador and delivered a note of protest over what it described as "terrorist attacks."

Abu Dhabi downgraded ties with Tehran in 2016 after attacks on Saudi diplomatic missions in Iran. Relations deteriorated further after the UAE joined the Abraham Accords in 2020.

In recent years, however, ties had begun to improve. The UAE's national security advisor, Sheikh Tahnoon bin Zayed al Nahyan, visited Tehran in 2021, in a rare move aimed at warming ties.

About half a million Iranians are estimated to live in the Emirates, many of them in Dubai. The Emirate is home to an Iranian hospital, at least one Shiite mosque in Jumeirah and numerous businesses selling Iranian goods. Despite periodic diplomatic strains, the two countries have maintained significant trading ties. Iran and the UAE are also at odds over three contested islands in the Persian Gulf.

Saudi Arabia, which recently restored diplomatic relations with Iran in 2023 under a deal brokered by China, also condemned the attacks on the Gulf States and summoned its ambassador from Tehran.

— Emma Graham

U.S. Secretary of State Marco Rubio is scheduled to update top leaders of the Senate and House at 4 p.m. ET on Monday.

This comes on the back of coordinated strikes by the United States and Israel on Iran, and Tehran's retaliation that has seen it target U.S. bases in the region, including those in the UAE and Saudi Arabia.

— Lee Ying Shan

A group of Middle Eastern countries and the U.S. issued a joint statement Sunday night stateside, condemning Iran's missile and drone attacks and affirming their right to self-defense.

"The Islamic Republic's actions represent a dangerous escalation that violates the sovereignty of multiple states and threatens regional stability. The targeting of civilians and of countries not engaged in hostilities is reckless and destabilizing behavior," according to the statement.

"We stand united in defense of our citizens, sovereignty, and territory, and reaffirm our right to self-defense in the face of these attacks. We remain committed to regional security and commend the effective air and missile defense cooperation that has prevented far greater loss of life and destruction."

— Anniek Bao

Israel Defense Forces said they were retaliating against Lebanon-based militant group Hezbollah for targeting Israeli civilians.

"In response to projectile fire toward northern Israel, the IDF is striking Hezbollah targets across Lebanon," the IDF said in statement posted on X.

"Hezbollah is operating on behalf of the Iranian regime, opening fire against the Israeli civilians, and bringing ruin to Lebanon. IDF troops have prepared for such a scenario as part of Operation 'Roaring Lion', and are prepared for an all-fronts scenario," the statement read.

The IDF in 2024 killed Hezbollah's leader Hassan Nasrallah, who had led the Iran-backed militant group for more than three decades.

— Vinay Dwivedi

Lebanon's Iran-backed Hezbollah said it has launched missiles and drones toward Israel in retaliation for the killing of Iran's Supreme Leader Khamenei, according to Reuters.

In a post on X Monday, Israel Defense Forces said it was striking Hezbollah targets across Lebanon in response to "projectile fire" toward northern Israel.

"Hezbollah is operating on behalf of the Iranian regime, opening fire against the Israeli civilians, and bringing ruin to Lebanon. IDF troops have prepared for such a scenario as part of Operation 'Roaring Lion', and are prepared for an all-fronts scenario," Israeli defense forces said.

Israel and Lebanon agreed to a U.S.-brokered ceasefire in 2024, ending more than a year of fighting between Israel and militant group Hezbollah.

— Anniek Bao

Airlines are cancelling thousands of additional flights scheduled for this week with airspace closed over large swaths of the Middle East following the U.S.-Israeli strikes on Iran and retaliatory strikes in the region, including those affecting major airport hubs.

Hundreds of thousands of passengers remain stranded.

Another 1,000 flights in the region are canceled for Monday so far, according to aviation-data firm Cirium, on top of about 4,000 on Sunday.

Airlines are now extending service suspensions. Lufthansa Group said Sunday that it won't fly to Tel Aviv, Beirut, Amman, Erbil and Tehran until at least March 8.

—Leslie Josephs

Michael McFaul, Stanford professor and former U.S. ambassador to Russia, discusses what's next after a joint military operation killed Iran's leader.

—Jordan Smith

Crude oil prices jumped more than 7% Sunday evening, as market participants fear war between the U.S. and Iran will spiral out of control and lead to a major supply disruption.

U.S. crude oil rose more than 7%, or $5.08, to $72.10 per barrel by 6:14 p.m. ET. Global benchmark Brent jumped about 8%, or $5.91, to $78.78.

Tanker traffic through the Strait of Hormuz has effectively come to a halt as shipping companies take precautionary measures, according to consulting firm Rystad Energy.

"We view the pace of the rebound in traffic through Hormuz and the extent of Iranian retaliation as key for the oil price in the next few days," UBS analysts led by Henri Patricot told clients in a Sunday note.

It is possible that the market is looking at a material disruption that sends Brent spot prices above $120 per barrel, the UBS analyst told their clients.

—Spencer Kimball

Stock futures tumbled in overnight trading, adding an unstable Middle East to a list of growing worries for equity investors.

Futures on the Dow Jones Industrial Average dropped 517 points, or 1%, around 6 p.m. ET. S&P 500 futures lost 1% and Nasdaq 100 futures declined a little more than 1%. Gold futures jumped 2% as investors piled into the global safe haven.

—Yun Li

The U.K. has granted permission for the U.S. to use its military bases in the Middle East in an effort to destroy Iranian missiles and missile launchers, Prime Minister Keir Starmer said in an address on Sunday posted to X.

Starmer framed his decision as one of self-defense.

The move follows Iranian strikes across the region that have put British interests, citizens and allies in harm's way, despite the U.K. not having been involved in the initial U.S. and Israeli attacks on Iran, the prime minister said.

"We all remember the mistakes of Iraq, and we have learned those lessons," Starmer said. "We were not involved in the initial strikes on Iran, and we will not join offensive action now."

"But Iran is pursuing a scorched earth strategy," he added. "So we are supporting the collective self defense of our allies and our people in the region. Because that is our duty to the British people. It is the best way to eliminate the urgent threat and prevent the situation spiraling further."

Against this backdrop, the U.K.'s decision to allow the U.S. to use its bases is consistent with international law, he said.

— Greg Iacurci

Trump and senior administration officials have been largely absent from the public eye since Saturday's attacks on Iran. That's a striking difference from the norm when an administration takes a major military action.

Since announcing the strikes in an edited video message on social media in the early hours of Saturday morning, Trump hasn't emerged from his Mar-a-Lago club in Florida or delivered a public address to provide Americans with further rationale for the military operation — a break from historical norms, according to the New York Times. He appeared again on video late Sunday afternoon in another social media video.

Top administration officials also were absent from the Sunday morning television talk shows to discuss the attacks. Top Cabinet secretaries often complete the rounds of the shows, racing from studio to studio or video appearance to video appearance.

Instead, the White House communications team chose to let allies on Capitol Hill deliver the messaging, CNN reported, citing three people familiar with the discussions.

Trump himself has commented about the attack on Iran frequently in remarks to major media outlets on Sunday, but not on camera in any sort of nationally televised address or interview. Trump earlier Sunday spoke to CNBC's Joe Kernen in a telephone call about Iran, saying the U.S. military operations are "ahead of schedule."

Trump administration officials are scheduled to brief House members on the Iran strikes on Tuesday at 5 p.m. ET. All members of the House were invited to this classified briefing.

—Greg Iacurci

Crude oil prices are expected to jump when trading opens Sunday evening, as market participants fear war between the U.S. and Iran will spiral out of control and lead to a major supply disruption.

How the oil market ultimately reacts will depend on whether the war leads to a prolonged disruption to traffic through the Strait of Hormuz, the most important chokepoint in the world for the global oil trade.

Rystad Energy forecasts global benchmark Brent crude oil futures could spike by $20 when trading opens. Barclays says Brent could potentially hit $100 per barrel. Futures open at 6 p.m. ET.

Other analysts see a more modest jump depending on how the conflict develops. Prices should rise by at least $3 to $5 per barrel when trading starts, said Andy Lipow, president of Lipow Oil Associates.

Brent futures closed Friday at $73.21 a barrel, up 20% so far this year. U.S. crude closed at $67.02 per barrel on Friday, having run up 17% so far this year

—Spencer Kimball

Trump said Sunday the U.S. will "avenge" the deaths of three U.S. service members who were killed amid ongoing hostilities between the U.S. and Iran, and vowed to continue his bombardment until "all of our objectives are achieved."

"America will avenge their deaths and deliver the most punishing blow to the terrorists who have waged war against basically civilization," Trump said in a video statement to Truth Social. "Combat operations continue at this time in full force, and they will continue until all of our objectives are achieved."

Trump's remarks suggest a potentially longer U.S. engagement in Iran than other recent military operations. Earlier Sunday, U.S. Central Command said three U.S. service members had been killed — the first of the conflict that saw Iran's leader, Ayatollah Ali Khamenei, killed on Saturday.

"As one nation, we grieve for the true American patriots who have made the ultimate sacrifice for our nation, even as we continue the righteous mission for which they gave their lives," Trump said in the video, also warning that further casualties can be expected.

"We pray for the full recovery of the wounded and send our immense love and eternal gratitude to the families of the fallen, and sadly, there will likely be more before it ends," Trump said.

—Garrett Downs

U.S. House and Senate lawmakers will be briefed on the Iran strikes on Tuesday afternoon after members return to town.

House lawmakers will receive their briefing at 5 p.m. ET, according to a GOP staffer who spoke on condition of anonymity. Secretary of State Marco Rubio, Defense Secretary Pete Hegseth, CIA Director John Ratcliffe and Joint Chiefs of Staff Chairman Dan Caine will update lawmakers on the situation in Iran.

The Senate will get its own briefing on Tuesday afternoon.

—Emily Wilkins

The European Union on Sunday called for "maximum restraint" and the protection of civilians in Iran and the Middle East, according to a statement from the EU's chief diplomat Kaja Kallas.

"We call for maximum restraint, protection of civilians and full respect of international law, including the principles of the United Nations Charter, and international humanitarian law," Kallas said, speaking for all 27 EU nations. "The Middle East stands to lose greatly from any drawn-out war."

Kallas condemned Iran's retaliatory attacks on regional countries after the U.S. and Israel began a bombardment on Saturday that killed the Gulf nation's leader, Ayatollah Ali Khamenei.

"Iran's attacks and violation of sovereignty of a number of countries in the region are inexcusable," Kallas said. "Iran must refrain from indiscriminate military strikes."

Kallas also warned that further escalation in the Middle East could create economic consequences.

"The events unfolding in Iran must not lead to an escalation that could threaten the Middle East, Europe and beyond, with unpredictable consequences, also in the economic sphere," the statement said.

—Garrett Downs

The ongoing U.S.-Israeli bombardment of Iran is jeopardizing the country's prospects to play in this year's World Cup, according to the president of the country's soccer federation.

According to the Associated Press, soccer chief Mehdi Taj told the sports publication Varzesh3 that the country's participation is now in doubt. The U.S. is hosting the World Cup with Canada and Mexico.

"What is certain is that after this attack, we cannot be expected to look forward to the World Cup with hope," he said.

Iran is scheduled to play in the U.S. during the tournament.

—Garrett Downs

Trump spoke with the leaders of Israel, Bahrain and the United Arab Emirates amid ongoing military operations in Iran, according to White House press secretary Karoline Leavitt.

In a post to X, Leavitt did not specify which leaders Trump spoke with. Israel has carried out strikes in Iran alongside the U.S. and Iran has retaliated against U.S. allies in the region.

Leavitt also said the president has been briefed on a shooting that happened early Sunday in Austin, Texas. The shooting left three dead and injured more than a dozen others. The gunman – identified as a naturalized citizen from Senegal who lived in the U.S. for 15 years — killed two people and wounded 14 others, sources told NBC News. The shooting is being investigated as a possible act of terrorism, though the investigation is in very preliminary stages, sources told NBC News.

— Garrett Downs

The United Arab Emirates Capital Market Authority said Sunday that the Abu Dhabi Securities Exchange (ADX) and Dubai Financial Market (DFM) will be closed on Monday and Tuesday following the attacks in Iran.

"The Authority confirms that it will continue to closely monitor developments in the region and assess the situation on an ongoing basis, taking any further measures as necessary," the regulator said in a press release.

Kuwait's stock exchange had already implemented a trading suspension until further notice. Iranian missiles have hit Kuwait, as well as Amman, Doha and Riyadh, which remained open on Sunday.

—Greg Iacurci

UAE Economy and Tourism Minister Abdulla Bin Touq Al Marri discusses the ongoing situation with CNBC's Dan Murphy as the tourism hub is hit with hundreds of rockets from Iran, damaging key civilian infrastructure across Dubai and Abu Dhabi.

—Emma Graham

With Congress set to begin voting on a war powers resolution to halt Trump's assault on Iran this week, lawmakers on Sunday grappled over whether to buck the president after Iran's leader, Ayatollah Ali Khamenei, was killed.

"This is an illegal war," said Sen. Tim Kaine, D-Va., the lead sponsor of the Senate's version of the war powers resolution, in an appearance on "Fox News Sunday." "The Constitution says no declaration of war without Congress. The president has called this war against Iran."

A war powers resolution allows Congress to disapprove of a president's military action and force the pullback of troops. Should it pass, however, it would be mostly symbolic as Trump is almost certain to veto it.

The Constitution vests the power to declare war in Congress.

Sen. Mark Kelly, D-Ariz., said he is "going to have to take a close look at" the war powers resolution, but said he would be inclined to oppose Trump's war effort.

"I want to hear from the White House what their strategy is going forward," Kelly said. "You know, they went into this without any discussion with us ahead of time."

Rep. Ro Khanna, D-Calif., is leading the war powers resolution in the House with Rep. Thomas Massie, R-Ky. Some House Republicans have indicated they will support the measure in the House.

Khanna said on NBC's "Meet the Press" he believes his resolution has the votes to pass in the House, but it is "going to be very close."

"I believe this is a disastrous vote for any Democrat to vote for Donald Trump's war in the Middle East," Khanna said. "The point of this resolution is to say we do not want another war in the Middle East, or at least Congress should opine on that."

Even with strong Democratic support for the resolution and opposition to Trump's attack, however, not all Democrats are likely to come on board.

Sen. John Fetterman, D-Pa., said on Fox News' "Sunday Morning Futures" that he will "vote it down."

"It's not necessary, honestly," Fetterman said. "It's really an empty gesture."

Republicans have largely supported Trump's attack, despite some dissent.

—Garrett Downs

Trump said Sunday on social media that the U.S. had destroyed and sunk nine of Iran's naval ships and, in a separate attack, had "largely destroyed" the nation's naval headquarters.

He also suggested the U.S. would continue to target Iran's navy.

"We are going after the rest — They will soon be floating at the bottom of the sea," Trump wrote of Iran's ships on Truth Social.

— Greg Iacurci

The CIA tracked Iran's supreme leader, Ayatollah Ali Khamenei, for months to gain awareness of his habits and the places he visited, according to a New York Times report. A person familiar with the U.S. operations told the paper that the agency learned that Iranian officials would be meeting Saturday morning in Tehran and that the supreme leader would attend.

The U.S. shared the intelligence with Israel, people briefed on the matter told the Times, and went ahead with the operation that they had been planning.

—Christina Cheddar Berk

German Chancellor Friedrich Merz said Sunday that it was necessary for the U.S., Europe and other international partners to start looking ahead to the future of Iran and the Middle East, following the death of Iran's Supreme Leader Ayatollah Ali Khamenei in coordinated strikes by the U.S. and Israel.

"We want to work with our partners in the U.S., Israel, the region, and Europe to develop an agenda for the day after," Merz said, according to a report from Reuters.

Merz said he agreed with the U.S.' goals in Iran, including putting an end to the Islamic Republic's pursuit of nuclear weapons, but also cautioned of risks ahead, according to Reuters.

"We do not know how far the region will be drawn into escalation by Iran's harsh counterstrikes," Merz said, according to the Reuters report.

— Greg Iacurci

Hundreds of thousands of travelers are affected by airspace closures in the Middle East. It isn't immediately clear when the restrictions will lift and when airlines will complete safety checks to resume flights.

Airlines are likely to add additional flights to repatriate customers once they can fly again.

Because the disruptions are affecting some of the busiest hubs in the world, like Dubai, travelers' schedules have been disrupted, stretching to far-flung destinations like the Maldives and elsewhere.

Many travel insurance polices don't cover events like military conflicts or natural disasters after the fact, and customers would need what's known as "cancel anytime" policies to be fully refunded.

Read the full story here.

—Leslie Josephs

It's not only supply disruptions that could drive up the price of oil -- the fear of a disruption has an impact, too. Since tensions between the U.S. and Iran escalated, crude prices have risen, partly due to higher shipping costs. Insurers are raising prices for tankers transiting the Strait of Hormuz, which in turn raises oil prices. That rise ultimately trickles through to consumers.

"It is very early to tell at this point, but we would estimate that near-term rate increases for Marine Hull insurance in the Gulf could range from 25 to 50 percent," said Dylan Mortimer, marine hull UK war leader at insurance broker Marsh.

He added that a direct attack on merchant shipping could have "major repercussions across war insurance rates."

Brent crude, the global oil benchmark, settled at $72.48 per barrel on Friday, bringing its year-to-date gain to nearly 20%.

—Pippa Stevens

Trump will speak with Iranian leadership one day after launching a strike on the country that killed its leader, Ayatollah Ali Khamenei.

"They want to talk, and I have agreed to talk, so I will be talking to them," Trump told The Atlantic on Sunday.

The U.S.-Israeli joint assault on Iran comes after Washington and Tehran were engaged in talks for a new nuclear agreement. Trump lamented to The Atlantic that Iran did not speak to him earlier.

"They should have done it sooner. They should have given what was very practical and easy to do sooner. They waited too long," Trump said.

Trump declined to specify to the magazine when he would be speaking to Iranian representatives. However, he noted that many involved in the previous talks have since been killed.

"Most of those people are gone. Some of the people we were dealing with are gone, because that was a big— that was a big hit," the president said.

Iran has since launched a counterattack on the U.S. and its regional allies. U.S. Central Command announced Sunday that three U.S. service members were killed in the operation.

— Garrett Downs

The U.S. military used Anthropic's Claude artificial intelligence technology to support the strikes on Iran on Saturday, according to a report by Axios, which cited unidentified sources familiar with the Pentagon's operations.

Trump on Friday had ordered U.S. government agencies to "immediately cease" using Anthropic's services, after the AI startup refused to comply with demands about the use of its technology. He wrote on social media that there would be a six-month phase-out period.

Shortly afterward, Defense Secretary Pete Hegseth wrote on X that he was ordering the Pentagon to designate Anthropic a "Supply-Chain Risk to National Security." Anthropic, which signed a $200 million contract with the Pentagon in July, said it would fight such a designation in court.

Anthropic wanted assurances that its AI models would not be used for fully autonomous weapons or mass domestic surveillance of Americans. The Defense Department resisted that request.

The U.S. military's use of Claude during Operation Epic Fury in Iran follows its leveraging of the technology to capture Venezuelan president Nicolás Maduro in January, which prompted the initial feud between Anthropic and the U.S. government, according to the Axios report.

OpenAI struck a deal with the Pentagon just hours after Trump blacklisted rival Anthropic.

— Greg Iacurci

At least three tankers in the Gulf have been damaged since the U.S. and Israel began trading strikes with Iran, Reuters reported Sunday. It is unclear whether the damage to the tankers was done deliberately or accidently.

Shipping giant Maersk said it has paused Trans-Suez sailings through the Bab el-Mandeb Strait for the moment. Instead, some sailings will be rerouted around the Cape of Good Hope. All vessel crossings in the Strait of Hormuz are also suspended, it said.

"The safety of our crews, vessels and customers' cargo remains our key priority and we will continue to monitor the situation closely and take all needed actions," the company said in a statement. "We remain committed to minimising the impact on our customers' supply chains and will continue to keep them updated on the situation."

Reuters reported that shipping sources told them that more than 200 vessels including oil and liquefied gas have dropped anchor in the Strait of Hormuz and surrounding area. Positioned between Oman and Iran, the narrow channel is a potential chokepoint for global energy trade.

More than 14 million barrels per day traveled through the Strait last year, or a third of the world's total seaborne crude exports, according to data from energy consulting firm Kpler. Only a fraction of that can be rerouted.

—Christina Cheddar Berk

President Donald Trump told CNBC's Joe Kernen on Sunday that the U.S. operation in Iran is "moving along very well, very well — ahead of schedule."

"It's a very violent regime, one of the most violent regimes in history," Trump said, reached by phone. "We're doing our job not just for us but for the world. And everything is ahead of schedule."

Trump on Saturday began a joint strike on Iran that killed the country's leader, Ayatollah Ali Khamenei. Iran has since launched a counterattack. He has overseen the assault from his Mar-a-Lago residence in Palm Beach, Florida.

Trump addressed a potential off-ramp to end the conflict, which he said depends on many variables. But the president said things are moving in a positive direction.

"Things are evolving in a very positive way right now, a very positive way," he said.

— Garrett Downs

Three U.S. soldiers have been killed in the U.S.-Israeli military operation in Iran that killed the country's leader on Saturday, according to the U.S. Central Command.

"As of 9:30 am ET, March 1, three U.S. service members have been killed in action and five are seriously wounded as part of Operation Epic Fury," U.S. Central Command said in a post on X. "Several others sustained minor shrapnel injuries and concussions — and are in the process of being returned to duty."

The deaths are the first known U.S. casualties of the combat, which began early Saturday and has prompted fierce retaliation from Tehran. The identities of the soldiers have not yet been released, pending notification of their families.

Trump warned there could be casualties as a result of the operation on Saturday.

"That often happens in war. But we are doing this not for now, we are doing this for the future and it is a noble mission," Trump said.

—Garrett Downs

Sen. Mark Warner, (D-Va.), the top Democrat on the Senate Intelligence Committee, said on Sunday he's seen "no intelligence" to suggest that Iran was planning a preemptive strike on the U.S., as the Trump administration has claimed.

"I saw no intelligence that Iran was on the verge of launching any kind of preemptive strike against the United States of America," Warner said on CNN's "State of the Union."

"None," Warner, who has access to highly classified information in his role, added.

Warner's statement directly contradicts the Trump administration's justification for the conflict. The administration said Saturday that the strikes came as Iran was readying to hit U.S. interests.

"We had analysis that basically told us, if we sat back and waited to get hit first, the amount of casualties and damage would be substantially higher than if we acted in a preemptive defensive way to prevent those launches from occurring, and that is the focus of the campaign right now," a senior Trump administration official told reporters Saturday, according to MS Now.

Republicans have largely defended the president's strike.

Sen. Tom Cotton, (R-Ark.), Warner's counterpart, said on CNN Sunday that "President Trump is right that it is absolutely vital and necessary now to address that threat before it fully materializes in the near future."

— Garrett Downs

The U.S. Embassy in Jerusalem said it is "not in a position at this time to evacuate or directly assist Americans" who are trying to leave Israel.

Ben Gurion Airport, Israel's main international airport, remains closed to all commercial and charter flights, the Embassy said in a security alert.

It directed all U.S. government employees and their family members to continue to shelter in place in and near their residences until further notice.

"The U.S. Embassy reminds U.S. citizens of the continued need for caution and increased personal security awareness — including knowing the location of the nearest shelter in the event of a red alert as security incidents, such as mortar, rocket, and missile fire, and unmanned aircraft system (UAS) intrusions, often take place without any warning," the alert said. "The security environment is complex and can change quickly."

—Greg Iacurci

Oil markets are on edge ahead of the start of trading at 6 p.m. ET, and any jump in prices could lead to higher prices at the pump for U.S. consumers.

Andy Lipow, president of Lipow Oil Associates, expects crude prices to rise between $3 and $5 a barrel this evening, which translates to an 8 to 12 cent increase per gallon of gasoline. But he said the impact won't be felt immediately — it will take between 7 and 10 days to show up at the pump.

The national average for a gallon of regular gasoline is $2.98, according to AAA, down from $3.10 one year ago.

Lipow cautioned that a complete closure of the Strait of Hormuz could drive oil prices up by as much as $20 per barrel, translating to a 50-cent increase in the price per gallon of gasoline. Under such a scenario, the U.S., the European Union and others would likely tap their strategic petroleum reserves to counter supply disruptions, he said.

—Pippa Stevens

Another 1,579 flights in and out of major airports in the Middle East were canceled on Sunday, Cirium said. Dubai International Airport, which reported damage from an incident on Saturday, was the most affected, with 747 flights, or 70% of its flights, canceled, Cirium said.

At least 70% of flights were also canceled in Israel and Qatar.

Airspace closures in the region grounded hundreds of flights in the region.

—Leslie Josephs

OPEC+ has agreed to raise oil production by a modest 206,000 barrels per day, the group said in a statement Sunday.

"In view of a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories, the eight participating countries decided to resume the unwinding of the 1.65 million barrels per day of additional voluntary adjustments announced in April 2023 and agreed on a production adjustment of 206 thousand barrels per day," OPEC+ said.

The group includes Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman, among others.

The announcement comes amid heightened fears of a disruption to oil supplies from the Gulf region as U.S. and Israeli airstrikes target Iran's leadership and Tehran's retaliatory strikes on key regional cities in its vicinity.

For more, read Lee Ying Shan's story on how energy markets are braced for possible interruptions to energy supplies from the Middle East here.

—Azhar Sukri

The United Arab Emirates has been hit by retaliatory strikes from Iran for a second day. CNBC's team in the country heard explosions in Dubai and Abu Dhabi.

Dubai's media office confirmed that "debris from drones intercepted by air defences fell in the courtyards of two homes in Dubai, resulting in two injuries." The authorities also wrote on X that the major port and logistics hub of Jebel Ali was hit by "debris resulting from an aerial interception" which caused a fire at one of the berths.

On Saturday, the major travel and tourism hub of Dubai was hit by debris and several strikes. According to the Media office, the attacks hit the Fairmont Hotel on the Palm and the Burj Al Arab, which was on fire due to falling debris, authorities said. The Burj Al Arab, an iconic sail-shaped hotel on Dubai's landmark Jumeirah beach, stands out as a landmark of luxury, alongside the Burj Khalifa in Dubai's downtown.

Early Sunday morning, both Dubai and Abu Dhabi airports were hit by strikes. "Dubai Airports confirms that a concourse at Dubai International (DXB) sustained minor damage in an incident, which was quickly contained," officials wrote on X. The UAE's airspace remained closed and flights into Abu Dhabi via Etihad were suspended further until 2 a.m. local time on Monday.

Abu Dhabi confirmed earlier this morning that authorities "responded to an incident resulting from the interception of a drone that targeted Zayed International Airport. The interception led to falling debris, which resulted in one fatality of an Asian national and seven injuries."

Officials in Abu Dhabi confirmed an "incident involving the fall of debris from a drone after it was intercepted by air defence systems" onto one of the buildings at Etihad Towers, a major residential tower with a Conrad Hotel inside.

The incident resulted in minor injuries to a woman and her child, as well as minor material damage, according to a post by the Media Office. Shrapnel also hit the Union Towers building in Abu Dhabi in the last hour.

—Emma Graham

Iran has named senior cleric Ayatollah Alireza Arafi to its interim Leadership Council following the death of Supreme Leader Ayatollah Ali Khamenei.

A spokesperson for the Iranian Ministry of Foreign Affairs confirmed to MS Now that Arafi was elected alongside President Masoud Pezeshkian and Chief Justice Gholamhossein Mohseni Ejei to oversee the supreme leader's duties until a permanent successor is chosen.

Reuters, citing the ISNA news agency, reported that Arafi, a member of the Guardian Council and Assembly of Experts, will help guide the clerical republic through its constitutional transition.

-- Spriha Srivastava

Oil markets are bracing for a possible supply shock after U.S. strikes on Iran over the weekend reignited fears that flows through the Strait of Hormuz could be disrupted.

While analysts expect an immediate "knee-jerk" reaction to oil prices when trading resumes in New York on Sunday evening, the bigger question is whether tensions could escalate into a sustained interruption of Gulf exports. 

"At this point, it seems we are looking at a full-scale military conflict between the U.S. and Iran, which would be unprecedented and the trajectory impossible to assess," said Vandana Hari, CEO of energy research firm Vanda Insights.

Brent crude settled at $72.48 on Friday, bringing its year-to-date gain to about 19%. U.S. West Texas Intermediate (WTI) closed at $62.02, up roughly 16% so far this year.

Read the full story here.

-- Lee Ying Shan

Investors are bracing for risk-off trades once markets reopen after the weekend, as the conflict in the Middle East widens.

Gains are expected in so-called safe-haven assets like the U.S. dollar and gold, while equities could pull back.

Oil market participants have been closely watching the conflict, which risks a major oil supply shock in the Middle East.

Markets could swing between risk-on relief — if regime collapse removes the threat of oil blockades or nuclear escalation — and risk-off persistence if conflict drags on and supply disruptions intensify, according to Ben Emons of FedWatch Advisors.

Airlines have canceled hundreds of flights, while dozens of others were rerouted mid-flight due to closed airspace over a large swath of the Middle East. Airspace closures also forced carriers to scrub flights that would normally transit the region.

Read the full story here.

—Anniek Bao

Iran's internet been down for more than 24 hours, an online traffic monitoring organization said Sunday.

"The measure limits civic engagement at a key moment for the country's future after the killing of Ayatollah Khamenei in US and Israeli airstrikes," NetBlocks said in a post on X.

—Azhar Sukri

Israel said Sunday it has carried out more strikes against Iran's government in the capital.

"The Air Force, guided by Military Intelligence, has now launched a broad wave of strikes toward targets of the Iranian terror regime in the heart of Tehran," the Israel Defense Forces said in a post on X.

"Over the past day, the Air Force conducted extensive strikes to achieve air superiority and open the path to Tehran," the IDF said.

—Azhar Sukri

Iran woke up Sunday to a once-in-a-generation shock: state media confirmed Supreme Leader Ayatollah Ali Khamenei was killed in a joint U.S.–Israel strike.

For markets, the key question is what comes next.

Standard Chartered's Global Head of Research, Eric Robertsen, said in a note that investors had already been underpricing geopolitical risk. The U.S. dollar is only modestly weaker year-to-date, but the dispersion beneath the surface is telling: commodity-linked currencies are outperforming, suggesting markets are paying for exposure to scarce resources and terms-of-trade winners.

Ben Emons of FedWatch Advisors adds a high-volatility geopolitical lens. Leadership strikes in Tehran raise regime-change tail risks and leave an uncertain endgame. Markets could swing between risk-on relief — if regime collapse removes the threat of oil blockades or nuclear escalation — and risk-off persistence if conflict drags on and supply disruptions intensify.

The immediate pressure point may be energy. A sustained surge in crude prices would quickly ripple through inflation expectations and hit Asia's oil-importing economies hardest, analysts say.

As trading resumes, investors will be watching oil prices and the U.S. dollar versus Asian currencies for the first real signal of how seriously this shock is being priced in.

—Spriha Srivastava

Markets in the Middle East opened lower on Sunday due to regional tensions.

Shares in Muscat opened lower as investors withdrew funds, indicating market fear that the weekend's events would turn into a protracted conflict after Israel and the U.S. attacked Iran, and the Islamic Republic retaliated across Arab and Gulf cities.

Muscat's main index, the .MSX30, tumbled more than 3% in Sunday trade. The country was not targeted by the Islamic Republic as it played a key mediation role in talks between the U.S. and Iran in recent weeks. Oman's foreign minister took to X to express his "dismay" at the joint strikes on Iran by the U.S. and Israel, saying "active and serious negotiations have yet again been undermined."

Kuwait's stock exchange implemented a trading suspension until further notice. Kuwait was hit by Iranian missiles, as was Amman, Doha and Riyadh, which remained open on Sunday.

Saud Arabia's Tadawul was down nearly 1.5%, while Qatar's main benchmark traded down nearly 2%. Amman's bourse was also down 2%, while Bahrain's exchange hovered around 0.88% lower.

The United Arab Emirates has been subjected to a second day of explosions, heard by CNBC's team on the ground in the country. Dubai and Abu Dhabi's exchanges open for trade on Monday morning; they closed lower in Friday's trade.

Israel's Tel Aviv stock exchange opens Monday morning for trading, and the exchange shifted in January to Monday-Friday trading in line with global markets.

—Emma Graham

Iran's top security official, Ali Larijani, said the United States and Israel are seeking to "plunder and disintegrate" the country, Reuters reported, citing state television, as Tehran moves to shore up control following the killing of Supreme Leader Ayatollah Ali Khamenei.

Larijani said a temporary leadership council would be established on Sunday and warned that any "secessionist groups" attempting to take action would face a harsh response.

—Lee Ying Shan

The United Arab Emirates has ordered schools and universities nationwide to switch to remote learning from Monday to Wednesday as Iran launches attacks on Arab states with U.S. assets.

In a post on X Sunday, the UAE's Ministry of Education and the Ministry of Higher Education and Scientific Research said that students, educational and administrative staff in all public and private schools nationwide will switch to "distance learning" for the upcoming three days.

— Anniek Bao

U.S. President Donald Trump warned Sunday that Washington would respond with unprecedented force if Iran retaliates against recent U.S. strikes.

In a post on Truth Social, Trump wrote: "Iran just stated that they are going to hit very hard today, harder than they have ever been hit before," adding, "THEY BETTER NOT DO THAT, HOWEVER, BECAUSE IF THEY DO, WE WILL HIT THEM WITH A FORCE THAT HAS NEVER BEEN SEEN BEFORE!"

—Lee Ying Shan

Several loud explosions were heard in the Qatari capital Doha for a second day on Sunday, according to media reports.

Reuters reported blasts were heard in the Dubai area as well as Doha. In a video posted by Doha News on Sunday, thick smoke was seen billowing near Barwa in Doha after Iran launched missiles towards Qatar that hosts U.S. military bases.

— Anniek Bao

The death of Iran's Supreme Leader Ayatollah Ali Khamenei sets in motion a formal succession process that could have significant implications for the country's political stability, sanctions outlook and already strained economy.

However, analysts warned that elimination of the supreme leader does not equal transformation.

"Taking out Iranian Supreme Leader Ayatollah Ali Khamenei is not the same as regime change. The Islamic Revolutionary Guard Corps is the regime," the Council on Foreign Relations noted following his passing, limiting the prospects for immediate political or economic transformation. 

Marko Papic, chief strategist at Clocktower Group, echoed a similar views: "The Iranian economy is soon to be a parking lot unless the next Supreme Leader is more amenable to negotiating with the U.S."

Read the full story here.

— Lee Ying Shan

Airports in Dubai and Abu Dhabi were damaged overnight as Iranian retaliatory attacks spread across the Gulf states.

"An incident" at Dubai International Airport left four staff injured, according to a social media post by the emirate's media office.

Most airport terminals had been cleared of passengers, the authority said, adding that further updates will be provided as they become available.

Authorities in Abu Dhabi also reported an interception of a drone that targeted the Zayed International airport, killing an Asian national and leaving seven injured.

Iran has responded to the U.S.-Israel strikes by targeting Israel and multiple Gulf states, including the UAE, Qatar, Bahrain, Saudi Arabia, Kuwait, and Jordan, which host U.S. assets.

An intercepted Iranian drone reportedly caused a minor fire on the Burj Al Arab's outer facade.

One of the berths at Dubai's Jebel Ali Port also caught fire due to debris resulting from an aerial interception, according to local media reports, citing Dubai authorities.

—Anniek Bao

Iran experienced a near-total internet shutdown starting around 2 a.m. ET Saturday, according to independent internet monitoring group NetBlocks.

The organization, which uses network measurement and web traffic analytics to detect government-imposed outages, reported that national connectivity fell to just 4% of normal levels.

Posting on X, NetBlocks said the disruption coincided with U.S. and Israeli military operations and resembled restrictions imposed during last year's conflict with Israel.

—Lee Ying Shan

Commander-in-chief of the Islamic Revolutionary Guards Corps died in the U.S.-Israeli attack against Tehran on Saturday, the country's official news agency reported. Ali Shamkhani, representative of the Supreme Leader in the Supreme Defense Council, was also killed.

"We are hearing that many of their IRGC, Military, and other Security and Police Forces no longer want to fight and are looking for Immunity from us," Trump said in the aftermath of Iranian Supreme Leader Ayatollah Ali Khamenei's death.

— Vinay Dwivedi