U.S. President Donald Trump said on Friday that the United States will accept nothing less than unconditional surrender from Iran. His statement came as fighting across the Middle East continued to escalate.
In a message posted on social media, Trump said that once the conflict ends, the U.S. would support the selection of new leadership in Iran. He added that the goal would be to help rebuild the country’s economy and bring it back from what he described as the brink of destruction.
The comments came as military action across the region intensified and markets reacted to rising geopolitical risk.
Iran conflict escalates as Israel expands military campaign
The conflict has now entered its seventh day. Military strikes and retaliatory attacks have spread across several areas in the region.
Israel launched attacks on Hezbollah targets in Lebanon. Israeli forces also targeted infrastructure inside Tehran as part of their expanding campaign.
According to reports, the Israeli military said it is moving into the next phase of its operation against Iran. This follows an initial surprise strike stage earlier in the conflict.
Iran has responded with attacks of its own. The country’s Revolutionary Guards launched drones and missiles toward Tel Aviv.
Several Gulf nations also reported being targeted by Iranian strikes. Bahrain and Saudi Arabia were among the countries that said they faced attacks during the escalation.
Iran’s foreign minister warned that the conflict could turn into a long and difficult situation for those involved. He said the war could become a quagmire if it continues to expand.
However U.S. Defense Secretary Pete Hegseth said the United States has sufficient military resources. He stated that the country could continue the fight for as long as necessary.
The political situation inside Iran is also uncertain. Reports say Iran has delayed naming a successor to Ayatollah Ali Khamenei after he was killed in air strikes by U.S. and Israeli forces.
His son Mojtaba Khamenei is considered a possible successor. But Trump has reportedly called that possibility unacceptable.
Oil prices surge as Strait of Hormuz fears grow
Financial markets are closely watching the impact of the conflict on energy supply. One of the biggest concerns is the Strait of Hormuz.
This narrow shipping route sits south of Iran and handles about 20% of global oil supply. Any disruption there could severely affect global energy markets.
Shipping companies have already started reacting. Major container firms A.P. Moller Maersk and Hapag Lloyd temporarily stopped some routes passing through the Middle East that connect Europe and East Asia.
Oil prices have surged as a result. Brent crude climbed above $90 per barrel on Friday. The benchmark has risen more than 23% during the past week.
U.S. crude prices have also jumped nearly 21% since joint strikes against Iran began.
The rise in oil prices is already affecting consumers. Average gasoline prices in the United States have increased by about 27 cents. The national average now stands around $3.25 per gallon.
Rising oil prices spark inflation fears across global markets
Higher energy costs are raising new concerns about inflation. Investors worry that a prolonged conflict could push fuel prices even higher.
If inflation rises again, central banks may delay plans to cut interest rates. U.S. bond yields have already moved higher this week.
Stock markets have felt some pressure but remain relatively stable so far.
Outside the United States, the impact has been stronger. Asian markets have struggled due to their dependence on imported energy.
South Korea has been particularly affected because much of its oil passes through the Strait of Hormuz. The Kospi index ended Friday mostly unchanged but has fallen more than 10% over the past week.
European markets are also heading toward their largest weekly decline since April.
The United States has taken steps to calm energy markets. Officials announced that India will be allowed to purchase Russian oil for the next 30 days.
Analysts say the move is part of a broader strategy to keep oil prices under control. The U.S. Treasury Department is also expected to introduce additional measures aimed at stabilizing energy markets.
For now global markets remain focused on the conflict. Investors are watching closely to see whether the situation escalates further or moves toward a diplomatic solution.