Amidst the escalating fighting, Iran on March 9 officially appointed cleric Mojtaba Khamenei as the new Supreme Leader, succeeding his father Ali Khamenei, who died in an attack more than a week ago.
The decision was made after a vote by the Council of Experts - an agency of 88 clerics tasked with selecting the Supreme Leader of the Islamic Republic. In a statement issued shortly after midnight Tehran time, the council said that Mr. Mojtaba Khamenei was elected with an "overwhelming majority" to become the third Supreme Leader of the Iranian political system.
This position gives him ultimate decision-making power over all strategic issues of the country, from military, security to foreign policy.
Before being elected, Mr. Mojtaba Khamenei was long considered a top candidate. This secretive cleric had a profound influence in the security forces as well as the large economic network formed under his father.
The change of power takes place amid a rapid escalating war between Iran and Israel and the US. In just over a week of fighting, a series of Iranian military and energy facilities have been attacked.
According to the Iranian Ambassador to the United Nations, the airstrikes have killed at least 1,332 civilians and injured thousands.
On the US side, the US military said that another soldier died from injuries sustained in Iran's initial counter-attack, bringing the total number of US soldiers killed to 7.
Political developments in Iran immediately strongly impacted the energy market. US crude oil prices rose more than 20% in the first trading session of the week, reaching their highest level since July 2022. Investors are concerned that global oil supplies will be tightened as wars damage energy facilities and threaten transportation through the Strait of Hormuz, the world's strategic shipping route.
Domestically, Iranian armed forces have quickly declared allegiance to the new leader. The Iranian Islamic Revolutionary Guard Corps (IRGC) said they are ready to obey all orders from Mr. Mojtaba Khamenei.
Meanwhile, President Donald Trump warned that the US wants to have a voice in choosing Iran's new leader. Speaking to ABC News, Mr. Trump said that if the new leader "does not receive approval from the US, it will not last long".
Israel is also increasing pressure. Prime Minister Benjamin Netanyahu declared that the military campaign against Iran will continue and directly target the country's leadership.
At the same time, airstrikes on fuel depots and energy facilities in Tehran covered the sky of the Iranian capital with black smoke. Iranian Foreign Ministry spokesman Esmaeil Baghaei called the attacks a "new dangerous phase" of conflict and accused them of causing serious environmental pollution.
However, the Israeli military affirmed that these fuel depots serve Iran's ballistic missile program and are therefore "legal military targets".
With the new Iranian Supreme Leader coming to power while the war shows no signs of cooling down, many observers believe that the confrontation in the Middle East is entering a more unpredictable phase, which could last and shock the global oil and gas market.
