Oil tankers burn near Iraq as Iranian strikes defy Trump’s claim to have won the war

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DUBAI/TEL AVIV/WASHINGTON – Iran set ablaze two tankers in Iraqi waters as it stepped up attacks on oil and transport facilities across the Middle East, warning that the world should be ready for oil at US$200 a barrel in defiance of US President Donald Trump’s claim that the US had already won the war.

The war unleashed with joint US and Israeli air strikes nearly two weeks ago has so far killed around 2,000 people, mostly Iranians and Lebanese, and has spread to Lebanon. It has thrown global energy markets and transport into chaos.

The conflict has spread across the Middle East and prompted plans for a record release of strategic oil reserves to dampen one of the worst fuel shocks since the 1970s.

The United Nations Children’s Fund said more than 1,100 children had been killed or injured.

At a campaign-style rally in Kentucky ahead of November midterm elections, in which his Republican party is trailing badly, Mr Trump said the US had “won” the war but did not want to have to go back every two years.

“We don’t want to leave early, do we?” he said on March 11. “We got to finish the job.”

Oil prices, which shot up earlier in the week to nearly US$120 a barrel before settling back to around US$90, rose nearly 5 per cent on March 11 and extended gains in Asian trade on March 12 amid renewed fears about supply disruption. Wall Street’s main share indexes fell and stocks in Asia followed suit.

Iran has made clear it intends to impose a prolonged economic shock, with a spokesperson for Iran’s military command saying in remarks directed at the US on March 11: “Get ready for oil to be $200 a barrel, because the oil price depends on regional security, which you have destabilised.”

Iranian explosive-laden boats appear to have attacked two fuel tankers in Iraqi waters, setting them ablaze and killing one crew member after projectiles struck three vessels in Gulf waters, said port, maritime security and risk firms.

“This appears to mark a direct and forceful Iranian response to the IEA’s (International Energy Agency) overnight announcement of a massive strategic reserve release aimed at cooling runaway prices,” said Mr Tony Sycamore, analyst at IG.

Iran also targeted fuel tanks at a facility in Bahrain’s Muharraq, the Interior Ministry said.

The IEA, made up of major oil-consuming nations, recommended releasing 400 million barrels from global strategic reserves to dampen one of the worst oil shocks since the 1970s, the biggest such intervention in history.

Mr Trump said the IEA decision “will substantially reduce oil prices as we end this threat to America and the world”.

US Energy Secretary Chris Wright said Mr Trump had authorised the release of 172 million barrels from the US Strategic Petroleum Reserve from next week.

Crucial oil route blocked

So far, there has been no sign that ships can safely sail through the Strait of Hormuz, the now-blockaded channel along the Iranian coast that serves as a conduit for around a fifth of the world’s oil.

On March 11, an Iranian military spokesperson said the strait was “undoubtedly” under Iran’s control. The Group of Seven industrialised nations – the US, Canada, Japan, Italy, Britain, Germany and France – agreed to examine the option of providing escort for ships so they can navigate freely in the Gulf.

Mr Trump said US forces had knocked out 58 Iranian naval ships and that Iran was “pretty much at the end of the line”.

He said the US would now “look very strongly” at the Strait of Hormuz. “The straits are in great shape. We’ve knocked out all of their boats. They have some missiles, but not very many,” he added.

Mr Trump said earlier that ships “should” transit through the strait, but sources said Iran had deployed about a dozen mines in the channel, further complicating the blockade.

ABC News said the Federal Bureau of Investigation had warned of Iranian drones potentially striking the US West Coast, although Mr Trump said he was not worried that Iran might launch strikes on US soil.

The US State Department also warned that Iran and aligned militias might be planning to target US-owned oil and energy infrastructure in Iraq and said that militias had in the past targeted hotels frequented by Americans.

US and Israeli officials have said their aim is to end Iran’s ability to project force beyond its borders and destroy its nuclear programme.

An Israeli military official said the military still had an extensive list of targets to hit in Iran, including ballistic missile and nuclear-related sites.

The US military told Iranians to stay clear of ports with Iranian navy facilities, drawing a warning from Iran’s military that if the ports were threatened, economic and trade centres in the region would be “legitimate targets”.

With pump prices surging, oil prices have become an increasingly urgent element in the calculations behind the war. REUTERS