Iran has warned Ukraine that it will respond to recent actions after Ukraine allegedly attacked an Iranian vessel in the Caspian Sea, resulting in the death of one sailor. Iran’s Deputy Speaker of Parliament, Ali Nikzad, stated that these actions will not go unanswered, suggesting potential military retaliation. This escalation comes as markets price a reduced likelihood of a US-Iran deal in 2026, with pricing at 27% for the inclusion of Iran Reconstruction Funding in such an agreement. The growing tensions between the two countries raise the prospect of a broader conflict in the region.
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