The rift between Iran and the United States is widening, raising fresh concerns across global political and economic circles. Tensions have intensified following a series of sharp statements, military warnings, and diplomatic interventions that briefly brought the two countries to the brink of direct confrontation, before a temporary pullback eased market anxieties.
US President Donald Trump recently claimed that Iran had cancelled the execution of nearly 800 people and said he respected the Iranian leadership for that decision. At the same time, Trump issued a stern warning that the US military would be deployed against Iran if Tehran carried out retaliatory actions, including the hanging of protesters. His remarks signalled a readiness to escalate militarily if the situation deteriorated further. Harsh response from Tehran. In response, senior Iranian cleric and government representative Ayatollah Ahmad Khatami delivered an aggressive speech attacking the protesters in uncompromising language. Khatami described them as bodyguards of Israeli Prime Minister Benjamin Netanyahu and mercenaries of Trump. He warned that those arrested would be hanged and declared that Americans and Israelis should not expect peace, but rather harsh revenge.
According to Khatami, the unrest was not a popular movement but a foreign-backed conspiracy aimed at destabilising the Islamic Republic. He alleged that armed protesters had carried out large-scale destruction across the country, including the demolition of more than 350 mosques, 126 prayer centres, and 20 other holy sites. He further claimed that 400 hospitals, over 100 ambulances, 71 fire trucks, and 50 emergency vehicles were destroyed during the violence.
Gulf intervention averts war
At one point, Trump was reportedly close to ordering a direct military strike on Iran. However, key regional powers, Saudi Arabia, Qatar, Oman, and Egypt reportedly intervened diplomatically and urged restraint. They warned that any US attack would trigger Iranian retaliation against American military bases in the Gulf, particularly in Qatar, plunging not only the region but the global economy into crisis. These countries reportedly impressed upon Washington that an already volatile Central and West Asian region would be further destabilised by war. Following these interventions, Trump stepped back from immediate military action.
Situation inside Iran
Meanwhile, Iranian authorities claim that protests across the country have largely subsided and that normal life has returned to major cities. However, various agencies estimate that at least 3,090 protesters have been killed and thousands more detained during the unrest. The government continues to insist that the protests were violent, externally driven, and aimed at overthrowing the state.
There are also indications that Russian President Vladimir Putin intervened diplomatically to prevent further escalation. Putin reportedly held phone conversations with Iranian President Masoud Pezeshkian and Netanyahu. Despite these efforts, Russia has not offered military assistance to Iran, as it remains focused on the war in Ukraine. Moscow is also concerned about the collapse of allied regimes, following the fall of Bashar al-Assad in Syria and Nicolas Maduro in Venezuela.
Global markets reacted swiftly to the easing of immediate war fears. Crude oil prices, which had fallen nearly 5 per cent earlier, rebounded after the US paused its attack plans and reports suggested that unrest in Iran was fading. Oil is now trading at $59.34 per barrel, up 0.44 per cent, while Brent crude rose 0.58 per cent to $64.13. Gold, however, moved in the opposite direction. Prices fell by $23 per ounce to $4,596, and a further dip is expected in India today. The decline followed Trump’s decision to retain Kevin Hassett, Director of the National Economic Council, in the White House instead of allowing him to become chairman of the Federal Reserve. Hassett is seen as a strong advocate of steep interest rate cuts, which had earlier fuelled expectations of a gold rally. The reassessment of this outlook, combined with profit-taking, has weighed heavily on gold prices.
