Oil Tankers Burn Near Iraq As Iranian Strikes Defy Trump’s Claim To Have ‘Won’ The War
DUBAI/TEL AVIV/WASHINGTON, March 12 (Reuters) – Iran set fire to two tankers in Iraqi waters as it stepped up attacks on oil and transportation facilities in the Middle East and warned the world should be ready for oil at $200 a barrel, despite President Donald Trump’s claim that the United States had already won the war.
The war, launched nearly two weeks ago by joint US and Israeli airstrikes on Iran, has so far killed nearly 2,000 people and thrown global energy markets and transportation into chaos. The conflict has spread across the Middle East, prompting plans to release record levels of strategic oil reserves to ease one of the worst fuel shocks since the 1970s.
The United Nations Children’s Fund (UNICEF) said more than 1,100 children were killed or injured.
At a campaign-style rally in Kentucky ahead of the November midterm elections in which his Republican party fell badly, Trump said the United States had won the war but did not want to go back every two years.
“We don’t want to leave early, do we?” he said on Wednesday. “We need to finish the job.”
Oil prices, which rose to nearly $120 a barrel earlier in the week and then rebounded to $90, rose nearly 5% on Wednesday and extended gains in Asian trading on Thursday on renewed fears about supply disruptions. Stocks in Asia, Wall Street’s main stock indexes, followed suit.
Iran has made clear that it intends to inflict a long-lasting economic shock, and a spokesman for Iran’s military command told the United States on Wednesday: “Get ready for oil to be $200 a barrel, because the price of oil depends on the regional security that you are destabilizing.”
Iranian explosives-laden boats attacked two fuel tankers in Iraqi waters, setting them on fire and killing a crew member after shells hit three commercial ships in Gulf waters, port officials, maritime security and risk firms said Thursday.
“This appears to indicate a direct and forceful Iranian response to the IEA’s announcement of a massive strategic reserve aimed at cooling prices that spiraled out of control overnight,” said IG analyst Tony Sycamore.
Iran also targeted fuel tanks at a facility in Muharraq, Bahrain, the interior ministry said.
The International Energy Agency, a group of major oil-consuming countries, recommended on Wednesday the release of 400 million barrels from global strategic reserves to cushion the biggest response in history, one of the worst oil shocks since the 1970s.
Trump said the IEA’s decision “will significantly lower oil prices as we end this threat to America and the world.”
US Energy Secretary Chris Wright said Trump has authorized the release of 172 million barrels of oil from the US Strategic Petroleum Reserve starting next week.
IMPORTANT OIL ROAD HAS BEEN BLOCKED
So far there is no sign that ships can safely pass through the blockaded Strait of Hormuz along the Iranian coast, which serves as a conduit for about a fifth of the world’s oil.
On Wednesday, an Iranian military spokesman said the Strait was “undoubtedly” under Iranian control and that G7 countries (US, Canada, Japan, Italy, UK, Germany and France) had agreed to examine the option of providing escorts for ships so they can navigate freely in the Gulf.
Trump said US forces had disabled 58 Iranian naval ships and that Iran was “almost at the end of the line.”
He said the US would now “look very strongly” at the Strait of Hormuz, adding: “The straits are in great shape. We’ve knocked out all of their boats. They have some missiles, but not very many.”
Trump has previously said ships should pass through the strait, but sources said Iran has deployed about a dozen mines in the canal, further complicating the blockade.
ABC News said the Federal Bureau of Investigation warned that Iranian drones had the potential to strike the West Coast of the United States, but Trump said he was not concerned that Iran could launch an attack on U.S. soil.
The U.S. State Department also warned that Iran and affiliated militias may plan to target U.S. oil and energy infrastructure in Iraq and warned that militias have targeted hotels frequented by Americans in the past.
U.S. and Israeli officials have said their goal is to end Iran’s ability to project power beyond its borders and destroy its nuclear program. An Israeli military official said the military still has a large list of targets to hit in Iran, including ballistic missile and nuclear-related sites.
The US military has told Iranians to stay away from ports where Iranian naval facilities are located, prompting a warning from the Iranian military that economic and commercial centers in the region would be “legitimate targets” if the ports were threatened.
With pump prices rising, oil prices became an increasingly pressing element in the calculations behind the war.
(Reporting by Parisa Hafezi in Dubai, Alexander Cornwell in Tel Aviv and HEBRON, Bo Erickson in Kentucky and Washington and Reuters bureaus; Writing by David Brunnstrom and Lincoln Feast; Editing by Michael Perry)
