Israel claims ‘full aerial superiority’ over Tehran’s skies as strikes wage on

Tehran will “pay the price” for its fresh missile onslaught against Israel, the Jewish state’s defense minister warned Monday, as markets braced for a fourth day of ramped-up conflict between the regional powers.

Fire exchanges have continued since Israel’s Friday attack against Iran, with Iranian media reporting Tehran’s latest strikes hit Tel Aviv, Jerusalem and Haifa, home to a major refinery. CNBC has reached out to operator Bazan for comment on the state of operations at the Haifa plant, amid reports of damage to Israel’s energy infrastructure.

Iran’s Revolutionary Guard said overnight it deployed “innovative methods” that “disrupted the enemy’s multi-layered defense systems, to the point that the Zionist air defense systems engaged in targeting each other,” according to a statement obtained by NBC News.

Israel has widely depended on its highly efficient Iron Dome missile defense system to fend off attacks throughout regional conflicts — but even it can be overwhelmed if a large number of projectiles are fired.

On Monday, the Israel Defense Forces claimed they had “achieved full aerial superiority over Tehran’s skies” after previously saying they had deployed 50 fighter jets and aircraft in a coordinated strike mission. CNBC could not independently verify the report.

Iran has long struggled with an ageing aircraft fleet and has previously turned to Russia for fighter jet purchases.

The fresh hostilities are front-of-mind for investors, who have been weighing the odds of further escalation in the conflict and spillover into the broader oil-rich Middle East, amid concerns over crude supplies and the key shipping lane through the Strait of Hormuz connecting the Persian Gulf and the Gulf of Oman.

Oil prices retained the gains of recent days and at 1:11 p.m. London time, Ice Brent futures with August delivery were trading at $73.46 per barrel, down 1.04% from the previous trading session. The Nymex WTI contract with July expiry was at $72.14 per barrel, 1.15% lower.