Oil Hits $140 as U.S.-Iran Conflict Escalates

*※ [Global Morning Briefing] summarizes global news delivered by the Seoul Economic Daily.* **U.S. Strikes Bridge Near Tehran to Cut Iran's Missile Supply Lines; Brent Crude Tops $140** Military confrontation between the United States and Iran is escalating rapidly, pushing the Middle East to the brink of crisis. Just one day after President Trump signaled a high-intensity offensive, U.S. forces struck a bridge near Tehran, causing civilian casualties. Iran retaliated immediately by targeting U.S. military facilities in Bahrain and Jordan, widening the front lines. On the 2nd (local time), a highway bridge connecting Tehran and Karaj was hit by two airstrikes and collapsed, killing eight people and injuring 95. President Trump posted footage of the bridge destruction on Truth Social, warning that "Iran must reach a deal before it is too late." The U.S. military claimed the operation was aimed at cutting supply routes for Iran's missile and drone units, but Iran countered that the bridge had never been used for military purposes. Iran has also played a strategic pressure card alongside its military response. In an interview with Russia's Sputnik news agency, Iran's deputy foreign minister said new rules would be applied to vessel passage through the Strait of Hormuz after the war ends. He added that Iran and Oman are jointly developing a strait control protocol. The move is interpreted as an attempt to seize control of the Strait of Hormuz, a critical chokepoint for global oil shipments. The intensifying conflict is sending immediate shockwaves through international energy markets. Brent crude spot prices surpassed $140 per barrel for the first time since the 2008 global financial crisis. U.S. West Texas Intermediate (WTI) futures also broke above $110 per barrel for the first time in four years. If the situation drags on, severe disruption across global energy supply chains is feared to be unavoidable. **"Not Hormuz, Another Way"… Middle East Scrambles for Alternative Export Routes** Iran's tightening grip on the Strait of Hormuz is making a sweeping reorganization of Middle East oil supply chains a reality. Saudi Arabia and other oil-producing nations in the region are staking their survival on securing alternative export routes through overland pipelines instead of sea lanes, setting off full-scale competition for energy dominance. The most closely watched alternative since the Hormuz blockade is Saudi Arabia's Petroline. Built during the Iran-Iraq War in the 1980s, the 1,200-kilometer pipeline connects Saudi Arabia's eastern oil fields to the Red Sea port of Yanbu. Before the war, the pipeline transported roughly 770,000 barrels per day. It now operates at its maximum design capacity of 7 million barrels per day. The UAE's Abu Dhabi pipeline has also ramped up to full capacity at up to 1.8 million barrels per day. Yet even combined, the two routes fall short of half the approximately 20 million barrels per day that once flowed through the Strait of Hormuz, making further expansion unavoidable. Middle Eastern countries are accelerating the construction of new routes. Iraq has begun restoring the Kirkuk-Ceyhan pipeline linking its northern oil fields to Turkey. Plans for a new pipeline connecting to Jordan's Red Sea port are also being revisited. However, Iraq's pipeline expansion costs could reach up to $20 billion (approximately 30 trillion won), and operational rights and political conflicts arising from multi-border crossings remain hurdles to overcome. Israel is also determined not to miss the opportunity. Prime Minister Netanyahu has publicly proposed an energy route conversion linking the Red Sea and the Mediterranean via Saudi Arabia. Israel is actively pursuing an extension of its EAPC pipeline to Yanbu in Saudi Arabia. With Iran declaring that "the Strait of Hormuz will never go back to the way it was," a structural shift in the Middle East's energy landscape appears to have already begun. **How Iran Built the Foundation of Its 'Resistance Economy'** As the core pillar enabling Iran to sustain a "resistance economy" through decades of sanctions and war, the secretive state-run conglomerate Jihad Nasr is drawing renewed attention. For 40 years, the group has monopolized Iran's major infrastructure projects, functioning as the regime's financial lifeline and a key tool of economic control. Founded in 1985 with the backing of Iran's state foundation Mostazafan, Jihad Nasr started with four companies. It has since grown into a sprawling group with a network of at least 170 firms. After the Iran-Iraq War, it took charge of urban reconstruction projects including new town development in Tehran, public housing, and subway and telecommunications infrastructure. The group also participated in the construction of nuclear and security facilities, including the Bushehr nuclear power plant and access roads to uranium mines. It has carried out more than 1,500 infrastructure projects, with billions of dollars in state funds invested. Though nominally privatized, the group maintains a semi-opaque structure closely connected to Iran's supreme leader and senior leadership. Revenue figures and executive details are kept strictly confidential, and political figures including former lawmakers are involved in management. The U.S. Treasury Department designated Jihad Nasr as a "semi-opaque state-owned infrastructure enterprise network" during its 2023 Iran sanctions. U.S. think tanks have criticized it as a conduit that siphons state funds to support both hardliners and reformists. Meanwhile, water resource development led by Jihad Nasr in cooperation with the Islamic Revolutionary Guard Corps has also sown seeds of domestic discontent. The diversion of water sufficient for tens of millions of people to sugarcane farming in the southwestern Khuzestan region has worsened chronic water shortages across Iran. The World Bank has pointed to this as a key factor behind the failure of Iran's water resource policies. In the post-war reconstruction phase, Jihad Nasr's role and the sustainability of the state-led economic model are expected to be critical variables. **Trump Fires Long-Time Ally Pam Bondi… Is a Cabinet Shakeup Underway?** President Trump abruptly fired Attorney General Pam Bondi, marking the second cabinet-level dismissal since the start of his second administration. Reports indicate that frustration over her reluctance to pursue investigations of political rivals and her insufficient handling of the Epstein allegations were the decisive factors, intensifying loyalty pressure within the White House. On the 2nd (local time), President Trump announced via Truth Social that Bondi would be moving to the private sector. Foreign media reported that Trump had long been dissatisfied with Bondi's passive approach to investigating political opponents, as well as her handling of allegations that he appeared on the contact list of convicted sex offender Jeffrey Epstein. Last month, Homeland Security Secretary Kristi Noem was dismissed after controversy grew over the death of a U.S. citizen during an immigration enforcement operation. The cabinet reshuffling is not expected to stop there. According to Politico, President Trump has expressed strong disappointment with the performance of Commerce Secretary Howard Lutnick and Labor Secretary Lori Chavez-DeRemer, and is reportedly considering further personnel changes. Some analysts suggest the moves are a strategic play to solidify the Republican advantage ahead of the November midterm elections. A shakeup of military leadership occurred simultaneously. Defense Secretary Pete Hegseth demanded the resignation and immediate retirement of Army Chief of Staff Gen. Randy George. No official reason was given for the dismissal. However, the decision came shortly after footage surfaced of a military Apache helicopter flying at low altitude over the home of Kid Rock, a pro-Trump entertainer, drawing public scrutiny. Gen. George, who took office in 2023, will leave without completing his four-year term. **Expensive High-Quality Weapons? Cost-Effectiveness Is Now the Trend in Warfare**

Oil Hits $140 as U.S.-Iran Conflict Escalates

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