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Iran struck the U.S. Embassy in Saudi Arabia’s capital with a drone early Tuesday, as it continued to target areas around the region.

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Across Iran’s capital, Tehran, explosions rang out overnight as the U.S. and Israel pounded Iran with airstrikes since killing its Supreme Leader Ayatollah Ali Khamenei on Saturday. Iran and its allies have hit back against Israel, neighbouring Gulf states and targets critical to the world’s oil and natural gas production.

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U.S. and Israeli airstrikes have killed at least 787 people in Iran since the start of the war, the Iranian Red Crescent Society said Tuesday.

The conflict has also spread to Lebanon, where the Iranian-supported militant group Hezbollah fired missiles at Israel on Monday, prompting Israel to retaliate. On Tuesday, the Israeli military hit Beirut with more airstrikes and said it had moved additional troops into southern Lebanon and taken new positions on several strategic points close to the border.

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China warns of ‘great repercussions’

China’s foreign minister warns of “great repercussions” of attack on Iran in phone call with Israel’s top diplomat, the Associated Press reported.

Chinese Foreign Minister Wang Yi told Israeli Foreign Minister Gideon Sa’ar that Beijing condemns the military strikes on Iran and calls for an immediate cessation of military operations to prevent the conflict from spiralling out of control, according to state-run Xinhua news agency.

Wang said China had always advocated for a political settlement of the Iran nuclear issue and that recent talks between Iran and the U.S. had been making clear progress before being disrupted by the military strikes.

Oil-rich Iraq to cut production

Iraq’s Ministry of Oil says it will stop its production in a key oil field as the ongoing war in Iran disrupted a key waterway into the oil-rich Persian Gulf.

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The widening war between Iran with the United States and Israel has ground tanker traffic through the Strait of Hormuz to a halt, causing crude oil prices to surge worldwide. About a fifth of the world’s oil passes through the strait, carrying oil and gas from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the UAE and Iran.

The ministry cited a shortage of tankers entering the gulf, forcing them to “stop production and pumping” from the southern Rumaila fields near the city of Basra. That tanker shortage caused “storage levels at our oil warehouses rising to critical levels.”

The strait is about 33 kilometers (21 miles) wide at its narrowest point. It connects the Persian Gulf to the Gulf of Oman. From there, ships can then travel to the rest of the world.

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Iran-backed Iraqi militants make veiled threat

An Iranian-backed militant group in Iraq has issued a veiled threat against Jordan, Saudi Arabia and the United Arab Emirates amid the widening war in the Middle East.

Kataib Hezbollah, one of the most powerful militant groups in Iraq, claimed that American aircraft that hit their camps earlier this week took off from an airbase in Jordan which houses U.S. forces.

The group also lashed out at Saudi Arabia and the UAE apparently for their criticism of Iranian missile and drone attacks in their territories.

It warned the two Gulf countries to “adjust their statements according to their true size … since their territories and capabilities are harnessed to serve the Zionist-American project.”

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Ukraine offers to swap drone interceptors for missiles

Ukraine is ready to give its domestically produced interceptor drones to Middle East countries in return for American-made air defense missiles it desperately needs, Ukrainian President Volodymyr Zelenskyy said Tuesday.

Ukraine needs U.S. PAC-3 missiles to counter cruise and ballistic missile attacks by Russia’s invading forces in their more than four-year war. Kyiv has also developed cheap and efficient interceptors to combat Russia’s Iranian-designed Shahed drones.

Dow drops as stocks sell off nd oil prices leap

A sell-off for stocks is slamming Wall Street after careening from Europe and Asia, and oil prices are leaping even higher as rise that the war with Iran is widening and may do more sustained damage to the economy than feared.

The S&P 500 dropped 1.6% in early trading on Tuesday. The Dow Jones Industrial Average sank 880 points, or 1.8%, and the Nasdaq composite lost 1.8%.

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