There were no signs of letup in the U.S.-Israel war on Iran Monday after Tehran named Mojtaba Khamenei to replace his slain father as supreme leader.
The appointment signaled that hardliners remain firmly in charge and appeared to close off any path to a swift end to the war amid U.S. threats.
The prospect that the disruption to global energy supplies – already one of the most severe in history – could last longer than previously expected sent oil prices surging in record leaps and global stock markets into a nosedive.
Khamenei, 56, a Shiite cleric with a power base among the security forces and their vast business empire, has been declared unacceptable by U.S. President Donald Trump, who has demanded Iran's unconditional surrender.
Iranian state media showed large crowds in the streets of several cities showing support for the new leader, carrying Iranian flags and portraits of his father Ali Khamenei, killed by strikes on the war's first day.
In Isfahan, state TV reported the sound of nearby explosions from apparent airstrikes as loyalists gathered in the historic Imam Square, chanting "God is the Greatest" below a stage with portraits of Ali and Mojtaba Khamenei. In Tehran, a eulogist could be heard singing: "Either death or Khamenei, our blood leads to paradise."
Politicians and institutions issued pledges of loyalty: "We will obey the commander-in-chief until the last drop of our blood," a defense council statement said.
However, Iranians reached by telephone were divided, with supporters of the authorities elated at the choice as a wartime declaration of defiance and opponents fearful it would dash their hopes for change.
"I am so happy that he is our new leader. It was a slap in the face to our enemies who thought the system would collapse with the killing of his father. Our late leader's path will continue," said university student Zahra Mirbagheri, 21, from Tehran.
Some Iranians had celebrated the elder Khamenei's death, weeks after his security forces clamped down on anti-government protesters in the worst domestic unrest since the era of Iran's 1979 revolution. But there has since been little sign of anti-government activity, with activists fearful of taking to the streets while Iran is under attack.
"The Guards and the system are still powerful. They have tens of thousands of forces ready to fight to keep this regime in place. We, the people, have nothing," said Babak, 34, a businessman in the central city of Arak, who asked to keep his family name confidential.
Israel says its war aim is to overthrow Iran's system of clerical rule. Washington was initially more circumspect, saying its aim was to destroy Iran's missile capabilities and nuclear program, but Trump later ratcheted up his demands by saying the war could end only with a compliant Iranian government.
Tel Aviv had said it would kill whoever succeeded the elder Khamenei unless Iran ended its hostile policies. Trump on Sunday again demanded that Washington have a say in the selection of the supreme leader.
"If he doesn't get approval from us, he's not going to last long," he told ABC News. In an interview with the Times of Israel after the new supreme leader was named, Trump declined to respond, saying only: "We'll see what happens."
The war has effectively shut the Strait of Hormuz, where a fifth of global oil and seaborne liquefied gas is shipped near Iran's coast. With tankers unable to sail for over a week, producers have run out of storage and are being forced to halt pumping.
Brent crude futures were up nearly 12.5% at $104.44 per barrel at 11:58 a.m. GMT, having earlier shot as high as $119.50, on track at one point for the biggest jump in a day.
Tehran, meanwhile, was choked in black smoke after an oil refinery was hit, an escalation in strikes on Iran's domestic energy supplies, which appeared to trigger attacks on Washington's Gulf Arab allies.
Thick smoke rose from a refinery in Bahrain, where the state oil company Bapco declared force majeure.
Israel's military said Monday it had launched attacks in central Iran and struck the Lebanese capital Beirut, where Israel has extended its campaign after the Iran-backed group Hezbollah fired across the border. It also launched what it described as a limited raid inside southern Lebanon.
U.S.-Israeli attacks have killed at least 1,332 Iranian civilians and wounded thousands, according to Iran's U.N. ambassador. Lebanon has reported scores of people killed there.
In Israel, ambulance workers said one man died from shrapnel wounds at a construction site near Tel Aviv's international airport Monday, raising to 11 the death toll in Iranian strikes.
