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What you need to know

Regional air war continues as Iran’s retaliation hits infrastructure and embassies

The air war between Iran and a widening ring of neighbors intensified on Tuesday, as Israel and the U.S. pressed their campaign inside Iran while Tehran and allied militias extended reprisals across the Gulf.

In Riyadh, Saudi Arabia’s defense ministry said two drones struck the U.S. embassy complex last night, causing a small fire and material damage but no reported injuries.

And the U.S. Embassy in Kuwait City was just hit by some kind of munition.

Further west, the U.S. began shifting air assets away from Spain after Madrid said it would not authorize its bases to be used for strikes on Iran.

Across the Gulf, air defense remains the main battlefield. Qatar said it shot down two Iranian Sukhoi Su-24 fighter-bombers and intercepted additional missiles and drones.

Iran’s pressure campaign has also increasingly focused on ports, tank farms, and shipping, rather than the attacks on hotels and other civilian infrastructure that characterized the first 48 hours of the conflict, especially in Dubai, Doha, and Bahrain.

In a new escalation reported on Tuesday, drones hit fuel infrastructure in Oman, the Omani port of Salalah, and an oil-storage area in the UAE, underscoring Tehran’s willingness to widen economic pain in response to attacks on Iranian territory.

In Iraq, Iranian-backed militias have publicly claimed a growing number of cross-border strikes since the war began, including against regional states hosting U.S. forces. A pro-Iran militia position in Samawah, in Iraq’s southern province of al-Muthanna, was struck by either US or Israeli airstrikes.

The nuclear file is also back at the center of the conflict. Today, the International Atomic Energy Agency said satellite imagery shows damage to the entrance buildings of Iran’s underground Natanz Fuel Enrichment Plant, while stressing that no radiological consequences are expected and that there is no additional impact detected at the enrichment plant itself. Natanz’s most sensitive enrichment halls are deeply buried and heavily reinforced.

There are also accounts of domestic unrest in Bahrain on social media, along with reports of the deployment of Saudi forces to reinforce the government in Bahrain.

Birthplace of civilization

Israeli ground move into Lebanon

Israel’s 91st “Galilee” Division crossed the Blue Line into southern Lebanon on Tuesday, in what Israeli officials are describing as a limited operation designed to seize additional “strategic areas” near the border.

The scale of the incursion remains unclear at this time. Lebanese outlets reported that the Lebanese Armed Forces pulled back from several recently established observation points along the Blue Line and regrouped in their main positions in border villages. The army had only in recent days announced new forward positions near villages including Yaroun, Maroun al-Ras and Aitaroun.

UNIFIL, the United Nations force tasked with monitoring the post-2006 arrangements, has asked non-essential personnel in the south to evacuate.

Civilian displacement is accelerating. Israel has issued evacuation warnings covering roughly 112 towns and villages in southern Lebanon and parts of the Bekaa Valley, including localities in the Bint Jbeil and Marjeyoun districts.

Beirut’s politics are hardening in parallel. On Monday, Prime Minister Nawaf Salam said the government would ban Hezbollah’s military activities and move to enforce a state monopoly over decisions of war and peace, an unusually explicit challenge to the group’s long-standing autonomy. On Tuesday, President Joseph Aoun told ambassadors from the “Quintet” (the U.S., France, Saudi Arabia, Egypt and Qatar) that the decision was final and irreversible.

The Cyprus theatre is adding to the pressure. The Greek government has assessed that the drones which struck Britain’s RAF Akrotiri base were likely launched by Hezbollah from Lebanon, using an Iranian-made Shahed-type system.

Taken together, the moves point to a fast-thickening northern front: an Israeli ground presence in Lebanon, and a tightening political line in Beirut against Hezbollah’s armed role. Should the Lebanese Army confront Hezbollah, extensive ground combat in Lebanon is likely.

Iran’s Revolutionary Guards widen drone pressure on Iranian Kurdish groups in Iraq after unity push and Trump calls

Iran’s Islamic Revolutionary Guard Corps (IRGC) has stepped up drone strikes against Iranian Kurdish opposition groups based in Iraq’s Kurdistan Region. Kurdish parties and local officials cast the attacks as an effort to head off a nascent unity drive among Iranian Kurdish factions and to deter further escalation as the regional war raises the stakes.

On Tuesday, 3 March 2026, the Democratic Party of Iranian Kurdistan (PDKI) said its “Azadi” camp in Koya was struck again, calling it the third drone attack on the site in recent days.

Earlier, on Sunday night, multiple Iranian Kurdish group facilities were hit across Erbil and Sulaymaniyah provinces. Komala’s headquarters in the Zargwez (Zirgwez) area of Sulaymaniyah province was struck. The Kurdistan Freedom Party (PAK) said positions between Erbil and Duhok, as well as other PAK sites, were targeted. Sites linked to the Kurdistan Democratic Party of Iran (KDPI) were hit in the Zwi Spi and Azadi areas of Koya district, along with a KDPI headquarters in the Dikla area of Erbil province.

Separately, the Iraqi Kurdistan Regional Government’s Ministry of Peshmerga Affairs said an explosive drone struck the headquarters of the Peshmerga 11th Brigade near the Degala subdistrict in Erbil province. The ministry did not assign blame, while urging Baghdad to act to prevent further attacks.

The latest strikes come days after Iranian Kurdish parties announced a coordination framework and issued public statements stressing unity. The effort points to both opportunity and vulnerability: the chance to organize politically as Iran comes under wartime strain, and the risk that Tehran treats Iraqi Kurdistan as the most convenient arena for punitive action.

The attacks also follow President Donald Trump’s reported phone calls to senior Iraqi Kurdish leaders, Masoud Barzani in Erbil and Bafel Talabani in Sulaymaniyah, as Washington considers how Kurdish networks and border terrain might shape the next phase of the conflict.

European markets wobble as Iran war hits Qatar’s LNG and jolts gas prices

European stocks fell on Tuesday as investors repriced the economic fallout from the expanding U.S.-Israeli war with Iran. The immediate trigger was energy: QatarEnergy halted LNG production after Iranian strikes hit operating facilities, including Ras Laffan, the country’s main LNG hub.

The shutdown pushed Europe’s gas market into panic mode. Benchmark Dutch TTF prices closed roughly 35–40% higher on Monday, and the move continued to ripple through risk assets on Tuesday.

That jump matters for European equities because it revives an old worry: imported inflation alongside weaker growth. Higher gas prices feed quickly into power costs and industrial margins, and they squeeze households already sensitive to energy bills. Bank and insurer shares led declines, reflecting concerns about slower activity and rising credit risk, while travel and transport stocks were hit by the prospect of higher fuel costs and wider regional disruption.

In short, the war is no longer just a geopolitical story. It is also an energy-supply shock, and Europe is again on the front line. We should expect the ripple effects on the global economy, across energy and commodity markets more broadly, to continue to grow in the coming days and weeks.

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