Iran New Leader Mojtaba Khamenei Sparks Market Fears of a Long War

Mojtaba Khamenei, the son of Iran’s Ayatollah Ali Khamenei—who was killed in U.S.-Israeli strikes—has been chosen as his successor.

Unlike his father, the 56-year-old has largely kept a low profile. He has never held a government post, nor has he given public speeches or interviews. Only a limited number of photos and videos of him have been publicly released.

However, for years there have been rumors that he wielded considerable influence behind the scenes in Iran.

According to the Associated Press, U.S. diplomatic cables published by WikiLeaks in the late 2000s described him as “the power behind the robes”, widely regarded within the regime as a “capable and forceful” figure.

According to Iranian media, Mojtaba served in the military for several short periods at the age of 17 during the Iran-Iraq War. The eight-year conflict, which was extremely bloody, further deepened the regime’s distrust of the United States and the West, which supported Iraq.

Now, as Iran’s newly chosen supreme leader, many expect Mojtaba to continue his father’s hardline policies.

Some also believe that a man who lost his father, mother, and wife in U.S.-Israeli strikes is unlikely to bow to Western pressure.

Notably, U.S. President Donald Trump warned on Sunday that Iran’s new supreme leader “is not going to last long” without his approval.

Inflation Fears Return as Oil Surges Above $100 and Stocks Slide

Markets fear that the Middle East conflict could become prolonged.

Oil futures jumped more than 10% at Monday’s open, surging above $100 a barrel—the first time prices have crossed that level since Russia’s invasion of Ukraine in 2022.

Oil could rise to $150 per barrel by the end of March if shipping through the Strait does not resume, said Homayoun Falakshahi, lead crude research analyst at Kpler.

The surge in oil prices has weighed heavily on equities in recent days, as traders fear that a prolonged spike in fuel costs could trigger another wave of inflation and damage economic growth.

Global risk assets have sold off sharply. Dow futures dropped more than 800 points, or 1.7%, while S&P 500 and Nasdaq futures fell 1.6%.

His Election Could Spark Controversy

Iran’s political ideology is based on the principle that the supreme leader should be chosen for his religious authority and proven leadership, rather than through hereditary succession.

Two years ago, a member of Iran’s Assembly of Experts—the clerical body responsible for selecting the supreme leader—said that Ali Khamenei opposed the idea of his son becoming a candidate for future leadership. However, he never publicly addressed the speculation.

Mojtaba’s leadership record remains largely untested, and the perception that the Islamic Republic is shifting toward hereditary rule could further deepen public dissatisfaction.