DUBAI/TEL AVIV, March 11 (Reuters) – Iran said the world should be prepared for oil to hit $200 a barrel as its forces attacked merchant ships on Wednesday in the blockaded Gulf.
Iran also fired at Israel and targets across the Middle East on Wednesday, demonstrating it can still fight back despite what the Pentagon has described as the most intense U.S.-Israeli strikes yet.
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Oil prices that shot up earlier this week have eased and stock markets have rebounded, with investors betting for now that U.S. President Donald Trump will find a quick way to end the war he began alongside Israel nearly two weeks ago.
Trump, who has repeatedly tried to reassure markets this week that the campaign will end soon, told Axios in a telephone interview that there was “practically nothing left” to target in Iran. “Little this and that… Any time I want it to end, it will end,” Trump said during a brief phone interview.
WORST ENERGY SUPPLY DISRUPTION SINCE 1970s
But so far there has been no let-up on the ground, or any sign that ships can safely sail through the Strait of Hormuz, where a fifth of the world’s oil has been blockaded behind a narrow channel along the Iranian coast in the worst disruption to energy supplies since the oil shocks of the 1970s.
The International Energy Agency, made up of major oil consuming nations, recommended releasing 400 million barrels from global strategic reserves to stabilise prices, the biggest such intervention in history, which was swiftly endorsed by Washington. But the rate at which countries can release it would account for just a fraction of the supply through the Hormuz Strait.
“Get ready for oil to be $200 a barrel, because the oil price depends on regional security, which you have destabilised,” Ebrahim Zolfaqari, spokesperson for Iran’s military command, said in comments addressed to the United States.
Oil prices, which shot up briefly to nearly $120 a barrel on Monday, have since settled around $90, suggesting investors are betting on a swift end to the war and reopening of the strait.
IRAN MAKES CLEAR IT INTENDS TO PROLONG ECONOMIC SHOCK
Iranian officials made clear on Wednesday they intended to impose a prolonged economic shock as the war carries on.
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 United States or Israel. People across the Middle East should stay 1,000 metres from banks, he added.
Iran’s Revolutionary Guards said their forces had fired on two ships in the Gulf that had disobeyed their orders. One, a Thai-flagged bulk carrier, was set ablaze, forcing the evacuation of crew, with three people reported missing and believed trapped in the engine room.
Reuters could not verify the second incident described by the Guards involving what they described as a Liberian-flagged ship. But two other ships, a Japanese-flagged container ship and a Marshall Islands-flagged bulk carrier, were reported to have sustained damage from projectiles.
The strikes raised the number of merchant ships that have been hit since the war began to 14.
