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The calm that lasted only a few weeks vanished in an instant. Late Sunday night, as most residents of Tel Aviv were preparing for bed, fiery trails of Iranian missiles lit up the skies over northern Israel. Israel’s Iron Dome air defense system sprang into action immediately—interceptions, explosions in the sky, sirens, and panic followed. Reports suggest that most of the projectiles were intercepted, but the significance of the attack far outweighed its direct military impact.

Why now? Why would Iran take such a risk? Tehran did not mince words. Iranian officials stated openly that the strike was retaliation for Israeli attacks on the southern suburbs of Beirut. Those operations were reportedly aimed at Iranian assets and proxy forces in Lebanon. One of the strikes hit an area near the Lebanese capital, where, according to Iranian authorities, advisers from the Islamic Revolutionary Guard Corps (IRGC) were among those killed.

Israel responded in its usual uncompromising manner, warning that the attack would not go unanswered. The message from Israeli military officials was essentially: “If we are attacked, we respond ten times harder.” Once again, the region appears to be standing on the edge of a broader conflict.

Perhaps most alarming is that the ceasefire reached in April—painstakingly negotiated by diplomats and viewed by many as a lifeline—now looks little more than a piece of paper. This is the most serious incident since the truce was signed. Hopes for diplomacy have dissipated faster than the smoke from the intercepted missiles.

As Asian markets opened on Monday morning, traders wasted no time reacting.

Brent crude futures, the global benchmark for oil prices, jumped 2.6% to $95.49 per barrel. U.S. benchmark WTI crude rose 2.4%...