Iran's Supreme Leader Ayatollah Mojtaba Khamenei declared Saturday that avenging his slain father and predecessor was "the demand of the nation," escalating tensions with Washington. The statement, made during funeral ceremonies for Ayatollah Ali Khamenei, emphasized that retaliation "must certainly" be carried out. The remarks signal a hardened stance following months of political and military strain between Tehran and the US.

The funeral, held months after Ali Khamenei was killed in US–Israeli airstrikes on February 28, drew thousands of mourners. Three sons of the late leader made a rare public appearance, but Mojtaba Khamenei remained absent. His absence is attributed to facial disfigurement and other injuries sustained in the strike, as well as ongoing threats to his life from Israel.

Pledge to Avenge

"We pledge to avenge the blood of the martyred leader and all the martyrs of these two wars from the criminal and disgraced killers," Mojtaba Khamenei said. His comments align with earlier statements from senior Iranian commanders, indicating a shift from symbolic mourning to operational intent within Iran's security establishment. Analysts view the message as a precursor to potential military action.

The renewed clashes have impacted global markets, with crude oil prices settling around $71 per barrel, recording a weekly gain of about 4%. The escalation undermines hopes for a tentative accord reached earlier this year between the two nations.

Trump Issues Warning

President Donald Trump responded with a stern warning on Truth Social late Friday, stating that Iran would face overwhelming military force if it attempted or carried out his assassination. "1,000 missiles are Locked and Loaded and aimed at the Islamic Republic of Iran, with thousands more to immediately follow," Trump wrote. He added that orders have been given and the US military is "ready, willing and able."

Washington Expands Financial Pressure

The US also intensified financial pressure on Tehran by sanctioning an Iranian financial facilitator through the Department of Treasury’s Office of Foreign Assets Control (OFAC). The Treasury accused the facilitator of institutionalizing large-scale embezzlement and targeted key Iranian exchange houses moving billions of dollars annually for sanctioned banks. Treasury Secretary Scott Bessent stated, "Treasury will continue using every tool at its disposal to isolate him and other regime elites from the global financial system."

Iranian Foreign Minister Abbas Araghchi accused the Donald Trump administration of breaching the memorandum of understanding (MOU) after the U.S. Treasury Department imposed fresh sanctions on Friday. The measures target an Iranian financial facilitator accused of diverting public funds overseas and several exchange houses allegedly used to move billions of dollars annually on behalf of sanctioned Iranian banks. The Treasury stated these actions followed Iran’s resumption of attacks on international shipping in the Strait of Hormuz. Araghchi responded on social media platform X, arguing that Iran had upheld its commitments while the U.S. failed to honor its own obligations, specifically citing violations of Paragraph 9 of the MOU. He emphasized that compliance must be mutual.

US Issues Saturday Ultimatum

The sanctions coincide with mounting pressure from the Trump administration, which has reportedly given Iran until Saturday to publicly affirm that the Strait of Hormuz will remain open and commit to ending attacks on commercial vessels. According to U.S. officials, Tehran violated the three-week-old MOU by repeatedly targeting ships in the strategic waterway, prompting President Trump to declare the ceasefire "over." One U.S. official warned that if Iran fails to make the requested commitment, "it is not gonna be a great day for them."

Diplomatic Efforts and Market Impact

Despite the heightened tensions, diplomatic efforts remain underway. Iran’s official IRNA news agency reported that Araghchi is scheduled to meet Omani Foreign Minister Badr al-Busaidi on Saturday as both sides seek to revive the fragile ceasefire. The collapse of the truce threatens stability in a vital waterway for global energy trade. Prior market reactions saw Brent crude rise roughly 3% to about $74 a barrel on news of tanker attacks, and above $76 after the U.S. revoked Iran’s oil export license. As of July 10, 2026, Brent crude eased 0.5% to $75.94 a barrel, while U.S. crude slipped to $71.71, remaining well above pre-conflict levels.

IMF Warns of Prolonged Inflation

The ceasefire is falling apart at a time when the International Monetary Fund (IMF) says the war’s impact on inflation could last until 2027. IMF chief economist Pierre-Olivier Gourinchas warned that a "severe scenario," involving energy shocks spilling into next year and central banks raising interest rates, could push global growth down to just 2% in 2026 and 2027. He specifically flagged the risk that the closure of the Strait of Hormuz and damage to energy infrastructure could trigger a major energy crisis if hostilities continued.