KEY POINTS
- Iran warned global oil prices could rise to $200 per barrel as the Middle East conflict disrupts shipping and energy markets.
- Several merchant ships were attacked in the Gulf while tensions around the Strait of Hormuz threaten a major oil supply disruption.
- The International Energy Agency has proposed releasing 400 million barrels of strategic reserves to stabilise global oil prices.
Iran has warned that global oil prices could surge to as high as $200 per barrel as tensions in the Middle East escalate and attacks on merchant vessels disrupt major shipping routes.
The warning came as Iranian forces struck several commercial ships in Gulf waters, further intensifying the global energy crisis triggered by the ongoing conflict involving Iran, the United States and Israel.
The war, which began nearly two weeks ago following joint U.S. and Israeli airstrikes on Iranian targets, has already resulted in the deaths of about 2,000 people, most of them in Iran and Lebanon. The conflict has also spread across the region, creating instability in global energy and shipping markets.
Three ships hit in Gulf as tensions escalate
On Wednesday, three vessels were reportedly struck in Gulf waters after Iran’s Revolutionary Guards said they had fired on ships that allegedly ignored military orders.
Among the affected vessels was a Thai-flagged bulk carrier that caught fire, forcing the crew to evacuate. Three crew members were reported missing and believed to be trapped in the engine room.
Two other ships, including a Japanese-flagged container ship and a Marshall Islands-flagged bulk carrier, also sustained damage from projectiles. These incidents bring the total number of merchant ships hit since the start of the war to 14.
The conflict has heightened fears over the safety of the Strait of Hormuz, one of the world’s most critical oil shipping routes through which about one-fifth of global oil supply passes.
Despite statements from U.S. officials suggesting the waterway could remain open, there has been little sign that commercial vessels can safely pass through the strait.
Iranian officials insist the strategic channel is firmly under their control. Reports also suggest that Iranian forces have deployed naval mines in the area, making navigation even more dangerous.
In response to the growing threat, the Group of Seven countries; the United States, Canada, Japan, Italy, Britain, Germany and France, said they were examining options to provide naval escorts for commercial vessels travelling through the Gulf.
Iranian military officials warned that the ongoing conflict could trigger a major economic shock for the global energy market.
A spokesperson for Iran’s military command said oil prices could rise sharply due to instability in the region, telling the international community to prepare for crude oil to reach $200 per barrel.
Energy markets have already reacted strongly. Oil prices surged to nearly $120 earlier in the week before easing to around $90 per barrel. However, prices rose again by almost five percent on Wednesday amid renewed fears of supply disruptions.
