Tensions were ratcheted up in the Middle East over night after Israel reportedly launched an unprecedented missile strike on Iran, as oil prices surged.
Iranian air defence batteries were launched on Friday morning after explosions near the city of Isfahan, in the centre of the country, according to its state-run IRNA agency.
It was widely reported that Israel had informed the US about the strike, but initially US officials would not comment.
Some analysts were also suggesting the attack could be de-escalatory, with Iran already saying there was no major damage from the attack.
Investing.com also claimed Iran was saying the attack hadn’t happened, and the missile defence system was set off by something else – but US officials appeared to confirm it.
IRNA said defences fired after the missiles struck, including at a major airbase in Isfahan, which long has been home to Iran’s fleet of American-made F-14 Tomcats — purchased before the 1979 Islamic Revolution.
Iranian state television says nuclear facilities near Isfahan are “fully safe” after air defence batteries fired in the area.
The semi-official Fars and Tasnim news agencies reported the sound of blasts without giving a cause.
State television acknowledges a “loud noise” in the area.
Tasnim later published a video from one of its reporters, who said he was in the southeastern Zerdenjan area of Isfahan, near its “nuclear energy mountain”, according to the Associated Press.
The footage showed two different anti-aircraft gun positions, and its details corresponded with known features of the site of Iran’s Uranium Conversion Facility at Isfahan.
“At 4:45, we heard gunshots. There was nothing going on,” he said.
“It was the air defence, these guys that you’re watching, and over there too.”
Dubai-based carriers Emirates and FlyDubai began diverting around western Iran at about 4:30am local time.
They did not explain, though local warnings to aviators suggested the airspace may have been closed.
Iran later announced it grounded commercial flights in Tehran and across areas of its western and central regions.
Hossein Dalirian, a spokesman for Iran’s civilian space program, said on the X social media platform that several small” “quadcopter” drones had been shot down.
Meanwhile, in Iraq, where a number of Iranian-backed militias are based, residents of Baghdad reported hearing sounds of explosions, but the source of the noise was not immediately clear.
All eyes on the markets
This comes after Iran launched a series of missile and drone strikes against Israel last Saturday night, after Israel bombed the Iranian consulate in Damascus.
Iran and Israel have been long-term enemies, with tensions increasing following the October 7 attacks by Iran-backed Hamas. The subsequent conflict in Gaza has seen more than 30,000 Palestinians killed, with Iranian proxies Hezbollah in Lebanon and Syria also engaging in skirmishes with Israel, and the Houthis in Yemen, disrupting international shipping.
According to Reuters, a wave of risk aversion swept over markets on Friday and sent investors chasing after traditional safety assets such as the Swiss franc and the yen following the attack.
Oil prices surged in response to reports of Israeli missile strikes hitting a site in Iran, sparking concerns about potential disruptions to Middle East oil supply. Initially, the benchmark contracts surged before slightly easing.
Brent futures rose by 3.04 per cent to reach $89.74 per barrel, while the most active US West Texas Intermediate contract climbed by 3.1 per cent to $84.64 per barrel. Investors have been closely monitoring Israel’s response to the Iranian drone attacks that occurred on April 13.
Britain imposes more sanctions
The moves came as European Union leaders meeting in Brussels vowed to ramp up sanctions on Iran to target its drone and missile deliveries to proxies in Gaza, Yemen and Lebanon.
The US sanctions target individuals and entities that produce engines that power drones and are involved in steel production. The latest British measures target several Iranian military organizations, individuals and entities involved in Iran’s drone and ballistic missile industries.
In Britain, the government said it had “sanctioned a further 7 individuals and 6 entities who have enabled Iran to conduct destabilising regional activity, including its direct attack on Israel.”
“This adds to the 400 plus sanctions already imposed on Iran. Previous sanctions include the Islamic Revolutionary Guard Corps (IRGC) in its entirety and many of those responsible for the attack on Israel.”
Prime Minister Rishi Sunak said: “The Iranian regime’s attack against Israel was a reckless act and a dangerous escalation. Today we have sanctioned the ringleaders of the Iranian military and forces responsible for the weekend’s attack. These sanctions – announced with the US – show we unequivocally condemn this behaviour, and they will further limit Iran’s ability to destabilise the region.”
Foreign Secretary David Cameron said: “At a time of great tension in the Middle East, Iran’s decision to launch hundreds of drones and missiles towards Israel carried with it a serious risk of thousands of civilian casualties and wider escalation for the region. The sanctions announced today alongside the US demonstrate our unequivocal condemnation of Iran’s attack on a sovereign state. The MSC Aries and its crew should be released immediately, and Iran should halt its reckless and unlawful behaviour. Further escalation is in no one’s interest.”
With contribution from Associated Press/Press Association/Reuters