U.S. orders staff to leave Saudi Arabia as war spreads; Iran rules out immediate ceasefire

The U.S. government on Monday ordered non-emergency government employees to leave Saudi Arabia as the war engulfing Iran widened across the Middle East. Iran also ruled out an immediate ceasefire while attacks continued.

The U.S. embassy in Riyadh cited heightened risks from armed conflict, terrorism and missile and drone attacks from Yemen and Iran. That marked the first such departure order issued by Washington in Saudi Arabia since the war began.

The Israeli military said Monday that it had begun a new wave of strikes targeting the infrastructure of the “terror regime” in central Iran.

An Iranian foreign ministry spokesman claimed Monday that the U.S. was “after Iranian oil reserves” and aimed to weaken and divide Iran, according to comments translated by Reuters.

When asked about the possibility of a ceasefire, the spokesperson said as long as attacks continue, there is “no point to talk about anything but defense and retaliation against enemies.”

It followed strikes on several Iranian oil facilities Sunday, igniting fires and sending thick smoke over Tehran and the neighboring city of Karaj. The attacks appeared to be the first on the country’s energy infrastructure since the war began.

Crude prices spiked above $110 per barrel Monday morning after several Middle East energy producers announced plans to cut output. G7 finance ministers are set to discuss the possible joint release of emergency oil reserves amid supply concerns, the U.K.’s Treasury and French government confirmed to CNBC on Monday.

The surge in oil price followed days of disruptions in the Strait of Hormuz, one of the world’s most important oil choke points. Tankers have avoided the narrow waterway after Tehran threatened to attack vessels attempting to transit the strait.

U.S. Energy Secretary Chris Wright said Sunday that traffic through the Strait would resume once Washington destroys Tehran’s ability to threaten shipping.

“The grace period that the market had in place for most of last week — assuming that this thing would not get out of control and start to spread with contagion to other parts of the economy — has clearly come to an end,” said Clayton Seigle, chair in energy and geopolitics at CSIS. “We’re probably going to have a crisis period for longer. The market … is kind of scrambling to catch up.”

Iranian officials named Mojtaba Khamenei, son of the late supreme leader Ayatollah Ali Khamenei, as the country’s new religious and political authority, consolidating control over the Iranian Revolutionary Guard and other hardline groups.

Israel warned previously that any successor to Khamenei would be a potential target, while U.S. President Donald Trump threatened that a new leader in Tehran would be short-lived if the decision was made without his approval.

Former CIA director David Petraeus said Sunday in an interview with CNN that the new leadership pick was “unfortunate,” as Mojtaba was seen as a “continuation of what his father was, which is a very hardline ideological cleric.”

Trump is also reportedly weighing deploying special forces on the ground to seize Tehran’s near-bomb-grade uranium, Bloomberg reported, as officials sought to verify the location of the stockpile of highly enriched material.

Shortly after oil surged past $100 Sunday evening stateside, Trump posted on Truth Social that a gain in “short term oil prices” was a “very small price to pay” for destroying Iran’s nuclear threat. “Only fools would think differently!”

Equities in Asia plunged on Monday as investors rushed to reduce risk exposure over growing concerns that the fighting may last longer than expected, while European markets fell over 2% in early trade.

The ramping-up of hostilities comes after Tehran had earlier signaled its intention to ease tensions with neighboring countries. In a pre-recorded video released on Saturday, Iranian President Masoud Pezeshkian apologized for striking Middle Eastern neighbors and said Tehran would stop firing at countries that weren’t aiding the U.S.-Israeli operation.

However, Saudi Arabia said Sunday that Iranian attacks have continued. Riyadh warned that the attacks are based on “flimsy pretexts that have no basis in reality,” leading to further escalation of tensions and harm relations “now and in the future.”

Iran has launched swarms of its Shahed ‘kamikaze’ drones to overwhelm the air defense systems across the Gulf, citing the presence of U.S. military bases and regional support for American strikes. The drones have also become a regular fixture of Russia’s arsenal in its years-long invasion of Ukraine.

Ukrainian President Volodymyr Zelenskyy told The New York Times that Kyiv had agreed to a U.S. request to send a team of experts and interceptor drones — far cheaper than the interceptor missiles — to protect American military bases in Jordan.

Other countries are also considering requests from Gulf nations for help in containing the attacks. Australia said it was reviewing requests from Gulf nations for defensive military support while reiterating that it would refrain from participating in offensive action against Iran.

China sent a special envoy to the Middle East last week to mediate a ceasefire. Its top diplomat Wang Yi reiterated Beijing’s call for an end to the military action during a press conference Sunday, lamenting the conflict as a war that “should never have happened.”