Heaviest Day of Strikes Yet on Iran Despite Market Bets That War Will End Soon

The United States and Israel pounded Iran on Tuesday with what the Pentagon and Iranians on the ground said were the most intense airstrikes of the war, despite global markets betting that President Donald Trump will seek to end the conflict soon.

Raising the stakes for the global economy, Iran‘s Revolutionary Guards said they would block oil shipments from the Gulf unless US and Israeli attacks cease.

“Today will be yet again, our most intense day of strikes inside Iran: the most fighters, the most bombers, the most strikes, intelligence more refined and better than ever,” US Defense Secretary Pete Hegseth told a Pentagon briefing.

Yet with Trump having described the war on Monday as “very complete, pretty much,” investors appeared convinced he would end it soon – before the disruption to global energy supplies worsened the global economy.

An historic surge in crude oil prices on Monday was mostly reversed within a day. Asian and European share prices staged a partial recovery from earlier precipitous falls, and Wall Street bounced to around its levels of late February, before the war.

A source familiar with Israel’s war plans told Reuters the Israeli military wanted to inflict as much damage as possible before the window for further strikes closes, under the assumption Trump could end the war at any time.

Israel’s foreign minister, Gideon Saar, said his country was not planning for an endless war and was consulting with Washington about when to stop it.

Iran has refused to bow to Trump’s demand that it let the United States choose its new leadership, naming hardliner Mojtaba Khamenei as supreme leader to replace his father, who was killed on the war‘s first day.

But occasionally contradictory remarks from Trump at a Monday press conference appeared to reassure markets he would stop his war before provoking an economic crisis like those that followed the Middle East oil shocks of the 1970s. He said the US had already inflicted serious damage and predicted the conflict would end before the four weeks he initially set out.

Trump has not defined what victory would look like, but on Monday did not repeat declarations that Iran must let him choose its leader.

Several congressional aides have said they expect the White House to soon request as much as $50 billion in additional funding for the war.

The US used $5.6 billion in munitions in the first two days of strikes against Iran, a source familiar with the information said on Tuesday.

“There is a big question mark over how long people can put up with the costs of this conflict,” said Clionadh Raleigh, CEO of US crisis-monitoring group Armed Conflict Location & Event Data, or ACLED.

Several senior Iranian officials voiced defiance on Tuesday.

“Certainly, we are not seeking a ceasefire; we believe the aggressor must be struck in the mouth so that they learn a lesson and never again think of attacking dear Iran,” Iran‘s parliament speaker, Mohammad Baqer Qalibaf, posted on X.

Foreign Minister Abbas Araqchi told PBS that Tehran was unlikely to resume negotiations with the US.

The war has effectively halted shipments through the Strait of Hormuz, where a fifth of global oil and liquefied natural gas normally passes along Iran‘s coast. Some of the world’s biggest producers have run out of storage and cut back output.

After Iran chose its hardline new leader, oil prices briefly surged to nearly $120 a barrel on Monday. But by 1500 GMT on Tuesday, Brent crude had settled back down below $90.

Trump said on Monday that if Iran blocks oil through the strait, “we will hit them so hard that it will not be possible for them or anybody else helping them to ever recover that section of the world,” he said.

But a spokesperson for the Revolutionary Guards said Tehran would not allow “one liter” of Middle Eastern oil to reach the US or its allies while US and Israeli attacks continue.

“We are the ones who will determine the end of the war,” the spokesperson said.

Iran is fighting back but is not tougher than the US military expected before the war, the top US general told reporters on Tuesday, at the same briefing where Hegseth promised the Pentagon’s most intense day of strikes in the 10-day-old conflict.

Asked if Iran was a stronger adversary than he expected when the US military drew up its war plans, General Dan Caine, chairman of the Joint Chiefs of Staff, told reporters the fight was not harder than expected.

“I think they’re fighting, and I respect that, but I don’t think they are more formidable than what we thought,” Caine told the Pentagon briefing.

Ending the war quickly would appear to preclude toppling Iran‘s leadership, which held large-scale rallies on Monday in support of the new supreme leader.

Many Iranians want change and some openly celebrated the death of the elder Khamenei, weeks after his security forces killed thousands of people to put down anti-government protests. But there has been little sign of protest during the war.

At least 1,270 people have been killed since the US and Israeli airstrikes began on Feb. 28, according to Iranian state media reports.

Scores have also been killed in Israeli attacks on Lebanon to root out the Iran-backed terrorist group Hezbollah, which has fired into Israel in solidarity with Iran. Iran said four of its diplomats were killed in a strike on a hotel in Lebanon on Sunday.

Iranian strikes on Israel have killed 12 people. Iran has struck US military bases and diplomatic missions in Arab Gulf states but also hit hotels, closed airports and damaged oil infrastructure.

Australia will deploy a military surveillance aircraft to the Middle East and send missiles to the United Arab Emirates but will not put troops on the ground in Iran, Prime Minister Anthony Albanese said on Tuesday.

Australia‘s military support would help the Gulf countries defend themselves against unprovoked attacks from Iran, Albanese said, stressing Australia was “not a protagonist.”

“Our involvement is purely defensive,” Albanese told reporters. “And it’s in defense of Australians who are in the region as well as in defense of our friends in the United Arab Emirates.”