Operation Epic Fury: US–Israel Strike Iran in Largest Joint Military Action Since 2003
Three days of airstrikes, retaliation and Strait of Hormuz disruption reshape the geopolitical and market landscape
KEY FACTS AT A GLANCE • ~500 targets struck across Tehran, Isfahan, Qom and Tabriz in the largest IAF operation ever • Supreme Leader Khamenei confirmed dead — 40 days of mourning declared, temporary leadership council formed • 3 US service members killed; 148+ killed in Minab school strike; 6+ killed in Israel; 9 Iranian ships sunk • Strait of Hormuz shipping halted — 3+ tankers attacked, Maersk & MSC suspend Gulf bookings, Jebel Ali closed • Gulf markets and airports disrupted — UAE closes Tehran embassy; Abu Dhabi & Dubai exchanges shut 2–3 March What Happened Day 1 — Saturday, 28 February In the early hours of Saturday morning Tehran time, President Trump issued a video statement announcing coordinated US–Israeli strikes against Iran, citing regime change goals and addressing Iranians directly. Within hours, approximately 200 Israeli jets supported by US assets launched Operation Epic Fury, striking roughly 500 targets across Tehran, Isfahan, Qom and Tabriz — making it the largest Israeli Air Force operation in history. Targets included military bases, missile sites, nuclear facilities, the state broadcaster, leadership compounds and key IRGC infrastructure. During the strikes, a direct hit on the Minab primary school killed at least 148 people, with more than 170 schoolgirls reported inside the building and over 92 wounded. By late Saturday, Iranian state media confirmed the death of Supreme Leader Ayatollah Ali Khamenei (86), killed in his office compound. Iran declared 40 days of national mourning. Iran’s response came swiftly. The IRGC launched retaliatory strikes against 27 US and Israeli bases across the Middle East, causing near-total internet blackout (4% connectivity) inside Iran. The UN called for de-escalation, while China and Russia condemned the strikes. In Karachi, nine people were killed in a protest at the US Consulate. Day 2 — Sunday, 1 March Sunday saw the conflict intensify on multiple fronts. Israel struck targets described as the “Heart of Tehran,” damaging Gandhi Hospital, knocking the state broadcaster offline and prompting the formation of a temporary leadership council. Three US service members were killed and five seriously wounded — the first confirmed American fatalities of Operation Epic Fury. Iran escalated with a barrage of missiles at Israeli civilian areas. The Beit Shemesh strike, approximately 19 miles from Jerusalem, hit residential buildings, killing at least six and hospitalising 23. Simultaneously, Iranian missiles and drones targeted Gulf states, striking Dubai, Abu Dhabi, Kuwait and Erbil. Qatar intercepted approximately 65 incoming missiles, while Kuwait experienced power outages. The Strait of Hormuz became a critical flashpoint. Three or more tankers were attacked, prompting Maersk and MSC to halt all Gulf bookings. Jebel Ali port was closed and regional shipping traffic fell an estimated 70%. President Trump announced nine Iranian naval vessels had been sunk, claiming Iran’s naval headquarters was “largely destroyed,” while signalling openness to dialogue with new Iranian leadership. By Sunday evening, the UAE closed its Tehran embassy, more than 7,700 flights were delayed or cancelled, and Iran began signalling interest in de-escalation via Oman. Day 3 — Monday, 2 March (Ongoing) As of the early hours of Monday AEDT, strikes continue across Tehran targeting Gandhi Hospital (again), the state broadcaster, police headquarters and other facilities. Civilian casualties continue to mount with no ceasefire in place. Iran’s interim leadership has declared there will be “no mercy or forgiveness in taking revenge for the leader.” On the energy and supply-chain front, China faces a one million barrel per day deficit. EU gas forecasts are up more than 25%. The US dollar has surged and gold is sharply higher. Diplomatic efforts are intensifying: Oman is pushing a ceasefire proposal, Saudi Arabia has summoned Iran’s ambassador, and France has convened a defence council meeting. Market Implications The conflict represents the most significant geopolitical shock to global markets since Russia’s invasion of Ukraine. The combination of direct strikes on a major oil-producing nation, closure of the Strait of Hormuz shipping corridor and destruction of Iranian naval assets creates a multi-layered supply shock that will ripple through energy, logistics and risk markets this week. What to Watch This Week Markets will open Monday into an extraordinary set of unknowns. The key variables to monitor are: whether Iran’s Oman-mediated ceasefire proposal gains traction; the duration of the Strait of Hormuz closure and its impact on physical crude and LNG flows; any further escalation involving Gulf state infrastructure (particularly Saudi Arabia); the trajectory of civilian casualties and the international diplomatic response; and whether the US signals a shift from active strikes to a containment posture. For Australian investors specifically, watch for Brent crude pricing…
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