From Singapore: The killing of Ayatollah Ali Khamenei in coordinated US-Israeli airstrikes on Tehran last Saturday has ended the longest unbroken supreme leadership in the history of the Islamic Republic and opened a period of profound uncertainty across the Middle East — one whose economic aftershocks are already being felt in commodity markets critical to Australia.
On 28 February 2026, Ali Khamenei, the second supreme leader of Iran, was killed in a joint airstrike operation by the United States and Israel. Iranian state media reported that he had been killed in an airstrike targeting his compound in downtown Tehran, where satellite imagery suggested his residence was severely damaged during the attack. He was 86 years old.
The announcement came first from Washington. Hours before Iranian state media confirmed the death, US President Donald Trump posted on Truth Social that Israel, with American support, had killed Khamenei, saying he "was unable to avoid our Intelligence and Highly Sophisticated Tracking Systems." Iranian state television confirmed the death shortly after, with an anchor breaking in to read a statement describing the supreme leader as having achieved "the blessing of martyrdom" following what it called a "barbaric attack." As reported by 9News, the state media presenter broke down in tears during the announcement, with others audibly crying off-screen.
The Iranian government announced 40 days of mourning and seven days of public holidays. Israel's military said that top Iranian security officials were among those killed, including the country's defence minister, the commander of the Revolutionary Guard Corps, and the secretary of the Iranian Security Council. Khamenei's daughter, grandchild, daughter-in-law, and son-in-law were also killed in the strikes, according to Iranian state media.
A Ruler Built on Revolutionary Power
Khamenei had ruled the Islamic Republic of Iran since 1989, previously serving as president under Ruhollah Khomeini's regime from 1981 until his ascension to the supreme leader. His consolidation of power was never guaranteed. Alex Vatanka, a senior fellow at the Middle East Institute in Washington, says Khamenei was an unlikely candidate who, as a midlevel cleric, lacked religious credentials and felt vulnerable. Yet he proved cunning enough to outwit other senior political figures and, with the help of the Islamic Revolutionary Guard Corps, built up his power base to become the longest-serving leader in the Middle East.
That grip on power came at an enormous human cost. Iran killed thousands of its citizens under Khamenei's rule, including more than 7,000 people killed during weeks of mass protests that started in late December 2025, according to the Human Rights Activists News Agency. His close ties to the Revolutionary Guards allowed Iran's military to develop a vast commercial empire controlling many parts of the economy, while ordinary Iranians struggled to get by.
The reaction inside Iran to news of his death was, according to 7News and multiple international reports, sharply divided. As his death was confirmed, many Iranian civilians went out to celebrate in the streets, with videos of celebrations circulating from cities including Isfahan, Karaj, Kermanshah, Qazvin, Sanandaj, and Shiraz. Separately, pro-regime crowds gathered in Tehran to mourn the supreme leader.
A Region Now in Motion
The strikes, which 7News reports were planned for months following unsuccessful negotiations over Iran's nuclear programme, have triggered a rapid and widening regional response. Iran responded by firing missiles at Israel as well as at US bases across the region in the United Arab Emirates, Qatar, Kuwait, Bahrain and Jordan. The UAE said three people were killed in Iranian attacks on the country, with Iran having launched 165 ballistic missiles targeting the UAE, of which 152 were destroyed. More than 3,400 flights were cancelled across seven Middle Eastern airports as airspaces remained closed for security reasons.
Russian President Vladimir Putin offered his condolences, describing the killing as committed in "cynical violation of all norms of human morality and international law," according to 7News. China's Foreign Minister Wang Yi called the US-Israeli attack "unacceptable" and condemned the "blatant killing of a sovereign leader and the incitement of regime change," expressing concern that "the situation in the Middle East may be pushed into a dangerous abyss." European Union foreign policy chief Kaja Kallas called Khamenei's death a "defining moment in Iran's history" and said the EU was working to find practical steps for de-escalation.
The legal and strategic debate over the strikes is substantial and should not be dismissed. Critics from the left and from international law scholars argue that a targeted killing of a head of state, however repressive, crosses a threshold that erodes the norms underpinning international order. Iran's Foreign Ministry described the strikes as a "gross violation" of its national sovereignty. Those concerns carry weight: if powerful states can unilaterally eliminate foreign leaders whose conduct they find intolerable, the precedent is deeply unsettling for smaller nations, including those in Australia's own region. Canberra has long relied on a rules-based international order as a cornerstone of its security and trade policy.
The Hormuz Question and What It Means for Australia
For Australian exporters and commodity importers, the signal is direct and urgent. Iran has reportedly moved to restrict navigation along the world's most critical oil export route after the US and Israeli strikes, stoking fears of a significant disruption to global energy markets. According to the US Energy Information Administration, about 20 million barrels of oil transited through the Strait of Hormuz each day in 2024, equating to nearly $500 billion in annual energy trade. Around 80 per cent of those flows go to Asia.
The strait is not only critical for oil: about 20 per cent of global LNG also passes through the narrow waterway, according to the Energy Information Administration. It is the sole export route for Qatar and the UAE, which together make up about one fifth of global supply, with more than half of the LNG passing through heading to China, India and South Korea. Any sustained disruption would place upward pressure on Asian LNG prices, directly benefiting Australian LNG exporters in the short term while raising manufacturing input costs across the region's supply chains.
Brent crude settled near $73 per barrel before the weekend, but analysts warn prices could surge when markets reopen. Oxford Economics sees Brent trading around $84 a barrel while Strait transit is disrupted, with the geopolitical uncertainty likely to keep a floor under prices through 2026, with Brent potentially averaging $79 a barrel over the second quarter. A spike of that magnitude would ripple through Australia's fuel costs and add inflationary pressure at a time when the Reserve Bank of Australia has only recently begun to ease its tightening cycle.
The Succession Problem
As the position of supreme leader is appointed by the Assembly of Experts and the position of vice supreme leader was abolished in 1989, Khamenei had no officially appointed successor. Iran has moved quickly to address the vacuum. A 66-year-old cleric, Ayatollah Ali Reza Arafi, a member of both the Guardian Council and the Assembly of Experts who was handpicked by Khamenei in 2019, has joined a three-member leadership council alongside President Masoud Pezeshkian and the head of the judiciary.
According to 7News, Khamenei's 56-year-old son has emerged as a potential successor after surviving the strikes that killed several other family members. Reuters reported that in the two weeks prior to the attacks, the CIA had produced assessments on Khamenei's likely succession, concluding that "hardline figures" of the IRGC would be most likely to replace Khamenei. If that assessment proves correct, hopes for a more moderate Iran in the aftermath of the strikes may prove premature.
The broader question for Canberra and its allies in the region is whether the elimination of a leader known for his hostility to the West ultimately produces a more stable Iran or a more desperate and ungovernable one. Although the United States and Israel eliminated a significant opponent, the ensuing security void and the IRGC's destructive response have resulted in a scenario where the threats to international stability may eclipse the tactical advantages gained from the assassination, according to one analysis. That is a calculation Australia's foreign policy establishment will be weighing carefully, given its dependence on a stable Indo-Pacific and open sea lanes.
History offers sobering lessons. The removal of Saddam Hussein in 2003 did not produce the democratic Iraq its architects promised. The question of what follows Khamenei deserves the same sober scrutiny. The Australian Parliament and the Department of Foreign Affairs will need to track not just the military developments, but also the economic disruption unfolding in the waters that carry Australia's trade. For all the strategic complexity, one thing is certain from Singapore: the next 72 hours in the Strait of Hormuz will matter as much to Australian households as anything happening in Tehran's palaces.