This week Iran laid to rest its former Supreme Leader Ayatollah Ali Khamenei in Mashhad, marking the end of six days of public mourning. US President Donald Trump announced the end of the ceasefire with Iran, warning that 1,000 missiles were “locked and loaded” in case Iran attempted to assassinate him. Meanwhile, China tested a submarine-launched long range missile that brings countries such as Australia within its range.
Tensions spiked in West Asia after the US’s sudden reversal shattered the fragile peace deal signed less than a month ago, on 17 June, which was brokered following an elaborate dinner hosted by French President Emmanuel Macron at the G7 Summit in Versailles.
The official collapse of the ceasefire unfolded in Turkey during the NATO summit. Seated alongside NATO Secretary General Mark Rutte, Trump launched a scathing verbal attack on Iran's leadership, branding them "scum" and "sick people."
The US also re-imposed sanctions on Iranian oil that the US Treasury had previously lifted until 21 August as part of the truce between Tehran and Washington.
These measures came after Iran struck three ships including a Qatari LNG vessel in the Strait of Hormuz. Iran said the attacks were in retaliation for Washington’s efforts to open up new routes for ships to pass through the strait, which it claimed constituted a breach of the pact. US Central Command launched retaliatory strikes in which at least 14 people were killed and another 78 wounded, AP reported, citing Iran’s health ministry. Most were reportedly members of Iran’s armed forces.
The rise in tensions is definitely a setback, though Trump said on Friday that the US agreed to continue peace talks only because Iran requested it. "The Islamic Republic of Iran has asked us to continue ‘talks’. We have agreed to do so, but the United States has stated to them, in no uncertain terms, that the ceasefire is OVER!" he wrote on Truth Social.
This leaves key questions unanswered: will Iran remain at the negotiating table under continued US attacks, and could another closure of the Strait of Hormuz be on the horizon? The uncertainty immediately rattled global energy markets, sending Brent crude to $80 a barrel and WTI to $71.41 before they paired gains. Prices cooled slightly following a Reuters report that a Qatari delegation had arrived in Iran on Friday, attempting to defuse tensions and lay the groundwork for US-coordinated negotiations.
Iran’s defiant display
All of this happened the same week Iran laid to rest former Supreme Leader Ayatollah Ali Khamenei (who was succeeded by his son Mojtaba Khamenei) at the Imam Reza shrine. The funeral at the Imam Reza shrine, Iran's holiest Shia Muslim site, concluded six days of public mourning ceremonies held across five cities in both Iran and neighbouring Iraq.
There’s been a lot of commentary, especially on social media, about the number of people who turned out to mourn Khamenei, which seemed truly impressive for someone against whom there were street protests just six months ago. Those protests were triggered by a severe economic crisis and the collapse of the Iranian currency. In late December 2025, the Iranian rial fell to about 1.4 million per dollar, its lowest ever, putting immense pressure on individuals and businesses. Iran said 3,117 people were killed in the protests but that is disputed by foreign governments and human rights groups, who say the number could be in the tens of thousands.
Seeing Khamenei’s funeral, it would be hard to imagine that Iran had been under heavy US and Israeli military bombardment for more than 40 days. The image projected was one of resilience.
Several foreign delegations attended the funeral – from Russia, China, Saudi Arabia, Qatar, Türkiye, Egypt, Iraq, Pakistan, Armenia, and several other countries. Of course, Western nations were absent, as were some regional countries such as the UAE, Bahrain and Kuwait, which bore the brunt of Iran’s attacks when the US and Israel were striking Tehran and other places.
What are the takeaways from this? Iran’s ruling establishment remains intact, with the Islamic Revolutionary Guard Corps (IRGC) firmly in control. While the initial lifting of sanctions, renewed oil and gas sales, asset defreezing, and the monetization of the Strait of Hormuz briefly promised an economic revival, that momentum faces a sudden halt. The massive crowds in the streets during the funeral were reminiscent of the 1979 Islamic Revolution.
Meanwhile, Trump said on Friday he had ordered the military to be prepared to launch strikes against Iran if the Iranian government attempted to assassinate him. "1000 Missiles are Locked and Loaded and aimed at the Islamic Republic of Iran, with thousands of more to immediately follow, should the Iranian Government act on its threat, pronounced in many corners of the Globe, to assassinate, or attempt to assassinate, the sitting President of the United States of America, in this case, ME!," he wrote in a Truth Social post.
Israel reportedly shared new intelligence with the US this week of a fresh Iranian plan to kill President Trump, a development that’s sure to escalate tensions between Washington and Iran. Tehran has for years vowed openly to retaliate against Trump for the assassination of Qassem Soleimani, a top general in the Islamic Revolutionary Guard Corps, during the US president’s first term. All this makes for a volatile mix that puts the region back on edge.
China’s Pacific friction
Also this week, China test-fired a long-range ballistic missile with a dummy warhead in the Pacific Ocean, the first such launch in almost two years. This set off alarm bells in the Indo-Pacific region (which China calls the Asia-Pacific region), with many countries criticizing the move as destabilizing.
This overt display of China’s rapidly expanding military power risks accelerating a defense buildup across the Pacific, driven by growing anxiety over the reliability of the US security commitment to the region. Highlighting this shift, Australia and Fiji signed a mutual defense treaty and a regional security alliance this week. The pact is part of Canberra's broader strategy to secure defense partnerships with Pacific Island nations—a clear effort to counter Beijing's growing influence in the region.
Last year, a Chinese naval task force carried out live fire drills in the Tasman Sea between Australia and New Zealand, prompting dozens of civilian flights to change course to avoid the area, the New York Times reported.
John Blaxland, professor of international security at the Australian National University and a former Australian military intelligence officer, told the New York Times that Beijing was testing not only its own capabilities but also the reactions from countries in the region as well as the US.
This escalation raises critical questions about how prepared regional players are for China's growing assertiveness. At the World Economic Forum in Davos this past January, Canadian Prime Minister Mark Carney emphasized the need for middle powers to unite to protect their strategic interests. Six months later—confronted by an unreliable US and a China actively testing regional resolve—middle powers such as India, Japan, South Korea, and Australia are executing independent strategies to navigate the crisis. Prime Minister Narendra Modi’s recent diplomatic tour of Indonesia, Australia, and New Zealand must be viewed in this context.
Elizabeth Roche is associate professor, O.P. Jindal Global University.