DUBAI/TEL AVIV, March 11 (Reuters) – Iran’s military command said on Wednesday, as three more merchant ships were attacked in the Persian Gulf, that the world must be prepared for oil to hit $200 per barrel.
Iran fired on Israel and targets across the Middle East on Wednesday, demonstrating it can still fight back and disrupt energy supplies despite what the Pentagon described as the most intense U.S. and Israeli attacks to date.
Oil prices, which soared earlier this week, have eased and stock markets have recovered, with investors betting for now that US President Donald Trump will find a quick way to end the war he started on Israel’s side nearly two weeks ago.
Yet so far there has been no respite on land, nor any sign that ships can now safely navigate the Strait of Hormuz, through which 20% of the world’s oil normally flows, in the worst disruption to energy supplies since the oil shocks of the 1970s.
“Get ready for oil to hit $200 a barrel because the price of oil depends on the regional security that you have destabilized,” Ebrahim Zolfaqari, a spokesman for Iran’s military command, said in comments aimed at the United States.
After bank offices in Tehran were hit overnight, Zolfaqari also said Iran will respond with attacks on banks that do business with the United States or Israel. People across the Middle East should stay away from banks, he added.
A senior Israeli official told Reuters that Israeli leaders now privately accept that Iran’s government system can survive the war. Two other Israeli officials said there was no sign that Washington was close to ending the campaign.
Mojtaba Khamenei injured
In the latest public show of defiance, large crowds of Iranians took to the streets on Wednesday for the funerals of top commanders killed in airstrikes. They carried coffins and brandished flags and portraits of the slain supreme leader, Ayatollah Ali Khamenei, and his son and successor, Mojtaba.
An Iranian official told Reuters that Mojtaba Khamenei was lightly wounded early in the war when airstrikes killed his father, mother, wife and son. He has not appeared in public or issued any direct messages since the start of the war.
The Iranian military said Tuesday it fired missiles at a U.S. base in northern Iraq, the U.S. naval headquarters for the Middle East in Bahrain and targets in central Israel. Explosions rang out in Bahrain, while in Dubai four people were injured by two drones that crashed near the airport.
Bahrain’s Civil Aviation Department said on Wednesday that several Gulf Air aircraft without passengers and some cargo planes had been transferred to alternative airports to “ensure the continuity and efficiency of air operations” during the crisis.
In Tehran, residents said they were getting used to the nightly airstrikes that sent hundreds of thousands of people fleeing to the countryside and contaminated the city with black rain from oil smoke.
“There were shellings last night, but I wasn’t scared like before. Life goes on,” Farshid, 52, told Reuters by phone.
IEA proposes large release of oil reserves
Three more merchant ships have been hit in the Persian Gulf by unknown projectiles, according to agencies that monitor maritime security, bringing to 14 the number of ships hit since the start of the war.
The crew was evacuated from a Thai-flagged bulk cargo ship after an explosion caused a fire. A Japanese-flagged container ship and a Marshall Islands-flagged bulk carrier also suffered damage.
Oil prices, which briefly rose to nearly $120 a barrel on Monday, have since settled around $90, suggesting investors are betting that Trump will be able to halt the war and reopen the strait soon.
Israel says there is no time limit for campaigning
U.S. and Israeli officials say their goal is to end Iran’s ability to project force beyond its borders and destroy its nuclear program, although they have also called on the Iranians to overthrow the country’s clerical rulers.
Israeli Defense Minister Israel Katz said on Wednesday that the operation “will continue without time limit, for as long as necessary, until we achieve all objectives and win the campaign.”
But the longer the war lasts, the greater the risk to the global economy, and if it ends with the survival of Iran’s clerical government system, Tehran will certainly declare victory.
More than 1,300 Iranian civilians have been killed since US and Israeli airstrikes began on February 28, according to Iran’s UN ambassador Amir Saeid Iravani. Many people were also killed in Israeli attacks on Lebanon.
Iranian attacks on Israel have killed at least 11 people and two Israeli soldiers have died in Lebanon. Washington says seven U.S. soldiers were killed and about 140 were injured.
