Recent intelligence reports suggest a major power shift is underway in Iran, with the military effectively taking the reins of the state.
According to U.S. and Israeli officials, the Islamic Revolutionary Guard Corps (IRGC), led by its new commander Ahmad Vahidi, is now in de facto control. This development follows the continued public absence of the new Supreme Leader, Mojtaba Khamenei, who is believed to have been seriously injured. This situation fundamentally changes our understanding of Iran's decision-making, shifting it from clerical guidance to a council dominated by military hardliners. This has direct consequences for ceasefire negotiations, regional stability, and, of course, global oil markets.
The evidence for this military takeover has been building for weeks. First, Mojtaba Khamenei's injury and subsequent disappearance from public view have been widely documented since he succeeded his father in early March. His messages have been read by news anchors, with no 'proof-of-life' videos or audio, fueling speculation that he is unable to govern.
Second, this leadership vacuum was created by the dramatic decapitation strikes on February 28, 2026, which killed the previous Supreme Leader Ali Khamenei and several top IRGC commanders. This event forced a rapid, crisis-driven succession and created an opportunity for the IRGC to consolidate power. Ahmad Vahidi was quickly appointed the new IRGC commander, ensuring military continuity.
Third, power has visibly concentrated within Iran's Supreme National Security Council (SNSC). This council is now operationally chaired by Vahidi and includes other hardline figures, effectively functioning as a military-led politburo. This institutionalizes the IRGC's influence over both military and political affairs.
The market has already reacted to this instability. The price of oil has surged, with funds like the United States Oil Fund (USO) rising over 57% since the war began, reflecting a significant 'war-risk premium'. Investors are pricing in the risk of a more aggressive, less predictable Iran led by military commanders, which could lead to prolonged supply disruptions in the Middle East. While some analysts caution that there is no definitive proof Mojtaba is completely non-functional, the balance of evidence points toward a state being run by its generals, at least for now.
- Islamic Revolutionary Guard Corps (IRGC): A powerful branch of Iran's armed forces, tasked with defending the country's Islamic Republic system.
- Supreme National Security Council (SNSC): Iran's top security body, responsible for formulating defense and national security policies.
- War-risk premium: An additional price added to oil and other commodities to account for the risk of supply disruptions due to conflict.