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In Brief
- The International Energy Agency has agreed to release 400 million barrels of oil.
- Iran’s Revolutionary Guards said their forces had fired on three ships in the Gulf that had disobeyed their orders.
Iran has issued a stark warning that the world should brace for oil prices soaring to $200 per barrel, as its military launched attacks on merchant vessels in the blockaded Gulf.
In a series of aggressive moves, Iran also targeted Israel and several sites across the Middle East on Wednesday. This escalation follows significant strikes on Iran by the United States and Israel, which the Pentagon has characterized as the most intense to date.
Earlier in the week, oil prices spiked but have since stabilized, with stock markets seeing a recovery. Investors are currently betting that U.S. President Donald Trump will quickly resolve the conflict that began nearly two weeks ago in collaboration with Israel.
In efforts to calm market fears, Trump has continued to express optimism, stating in a phone interview with Axios that there is “practically nothing left” to target in Iran.
Despite these assurances, the situation on the ground remains tense, with no indication that maritime traffic can safely navigate the Strait of Hormuz. This crucial waterway, responsible for transporting a fifth of the world’s oil, is currently experiencing its most severe disruption since the oil crises of the 1970s.
The International Energy Agency (IEA) has agreed to release 400 million barrels of oil, the largest such move in its history, to try to rein in crude prices.
The IEA said the release had been backed unanimously by 32 member countries, including Australia, in the sixth such move it has made since its creation in the 1970s.
It is aimed at preventing a further rise in oil prices on fears that Iranian attacks will continue to block Middle East oil exports from reaching markets.
“Get ready for oil to be $US200 a barrel because the oil price depends on regional security, which you have destabilised,” Ebrahim Zolfaqari, a spokesperson for Iran’s military command, said in comments addressed to the US.
Oil prices, which shot up briefly to nearly $US120 a barrel on Monday, have since settled around $US90, suggesting investors are betting on a swift end to the war and reopening of the strait.
After offices of a bank in Tehran were hit overnight, Zolfaqari also said Iran would respond with attacks on banks that do business with the US or Israel.
People across the Middle East should stay 1,000 metres from those banks, he added.
Iran’s Revolutionary Guards (IRGC) said their forces had fired on three ships in the Gulf that had disobeyed their orders.
One, a Thai-flagged bulk carrier, was set ablaze, forcing the crew to leave, with three people reported missing and believed trapped in the engine room.
Reuters could not verify another second incident described by the IRGC, involving what they described as a Liberian-flagged ship.
The strikes raised the number of merchant ships that have been hit since the war began to 14.
A senior Israeli official told Reuters that Israeli leaders now privately accept that Iran’s ruling system could survive the war.
Two other Israeli officials said there was no sign the US was close to ending the campaign.
The Iranian military said on Tuesday it had launched missiles at targets including a US base in northern Iraq, the US naval headquarters for the Middle East in Bahrain and at targets in central Israel.
In Tehran, residents said they were growing accustomed to nightly air strikes that have sent hundreds of thousands of people fleeing to the countryside and contaminated the city with black rain from oil smoke.
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