Good morning. The U.S.-Israeli military operation in Iran entered a third day Monday following a weekend of unprecedented escalation. Iran’s military announced fresh strikes against U.S. bases in the region on Sunday. The conflict has now widened to Lebanon, where the Israeli military struck Hezbollah targets, responding to an attack from the Iranian-backed group.

• Inflation risks: U.S. and Israeli strikes against the Iranian regime and military threaten to upend the global oil market and send shock waves through the world economy. Dozens of tankers diverted from the Persian Gulf in the early hours of the conflict. The U.S. Navy advised tanker companies to avoid nearby waters because it couldn’t guarantee their safety, according to an alert from an industry body. 
   
• Glitzy Gulf countries hit: For decades, the Arab states of the Persian Gulf sold themselves as an oasis of peace in a region prone to conflict, attracting wealthy expats, multinational corporations and investment. On Saturday, Iranian explosives pierced that lucrative bubble. Missiles and drones rained down on Qatar, Saudi Arabia, Bahrain and the United Arab Emirates, targeting bases and other strategic sites and scattering debris from intercepts. The attacks marred the business-friendly reputation Gulf countries took years to build. Iran has also systematically targeted its Arab neighbors’ airports.
   
• IRGC lives on: U.S. and Israeli airstrikes killed many of Iran’s top leaders in just hours, including Supreme Leader Ayatollah Ali Khamenei. But the huge security apparatus they oversaw to ensure the regime’s survival is still intact. Unless the Islamic Revolutionary Guard Corps is defeated or somehow turned, it will retain its ability to generate cash through illicit activities and help proxies like Houthi militants in Yemen harass the U.S. and its allies. The IRGC has its own military and intelligence divisions separate from the conventional armed forces and is deeply entrenched in the country’s businesses.

More coverage from The Wall Street Journal:

• Trump’s Shifting Goals for Iran Complicate Military’s Mission
• Trump Spent Years Denouncing U.S. Intervention. Now He’s Toppling Foreign Leaders.
• By Striking Its Neighbors, Iran Has Deepened the Gulf’s Resolve to Fight Back

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The weekend attacks on Iran by the U.S. and Israel, including the killing of the supreme leader, mark an escalation in a running conflict but also a significant rise in business risks. A 45-minute webinar today at 12 pm Eastern will look at the latest developments in rapidly shifting risk picture across multiple areas, including shipping and supply chains, energy markets, cyber-warfare and broad geopolitical risks.

The webinar will bring together a panel of specialists from across Dow Jones to address what the latest developments indicate about risks, how businesses are responding and more.

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• A long-running conflict between Pakistan and Afghanistan’s Taliban regime has turned into what Pakistan declared Friday to be “open war,” with attacks reported in Kabul and along the neighbors’ shared border.
   
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• Two drone-related mishaps in one month highlight problems between U.S. agencies.
   
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