Iran’s military commander said on Wednesday the world should prepare for oil to hit US$200 a barrel, as three more ships were attacked in the blockaded Gulf.
Iran fired on Israel and its targets across the Middle East on Wednesday, showing it can still fight back and disrupt energy supplies despite what the Pentagon described as the most intense US-Israeli strikes to date.
Oil prices that rose earlier this week have eased and stock markets have rebounded, with investors now betting that US President Donald Trump will find a quick way to end the war he started with Israel nearly two weeks ago.
But so far there has been no let-up, or any sign that ships can safely navigate the Strait of Hormuz, where a fifth of the world’s oil is blocked behind a narrow channel off Iran’s coast in the worst disruption to energy supplies since the oil shock of the 1970s.
“Be prepared for oil to be $200 a barrel, because the price of oil depends on the security of the region you have established,” said Ebrahim Zolfaqari, spokesman for the military in Iran, commenting on the United States.
After the bank offices in Tehran were hit overnight, Zolfaqari also said that Iran would respond with attacks on banks doing business with the United States or Israel. People throughout the Middle East should stay 1,000 meters from banks, he added.
A senior Israeli official told Reuters that Israeli leaders had now privately accepted that the Iranian regime could survive a war. Two other Israeli officials said there was no sign that Washington was close to ending the campaign.
An Iranian official says Mojtaba Khamenei is slightly injured
In the latest show of defiance, crowds of Iranians took to the streets on Wednesday for the funerals of top officials killed in airstrikes. They carried caskets and flags emblazoned with 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 at the start of the war, when strikes killed his father, mother, wife and son. He has not been seen in public or issued a direct message since the war began.
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The source also said Israel believed he suffered minor injuries.
Iran’s military said on Tuesday it fired missiles at a US base in northern Iraq, the US naval base in the Middle East in Bahrain, and targets in central Israel. There was an explosion in Bahrain, and in Dubai four people were injured when two drones crashed near the airport.
Bahrain’s Civil Aviation Affairs said on Wednesday that several Gulf Air planes without passengers, as well as some cargo planes, had been diverted to other airports to “ensure the continued operation of flights” during the crisis.
In Tehran, residents say they have become accustomed to nighttime airstrikes that have sent hundreds of thousands of people fleeing the countryside and polluted the city with a black rain of oil fumes.
“There was a bombing last night but I wasn’t as scared as before. Life goes on,” Farshid, 52, told Reuters by phone.
The IEA will propose a major release of oil reserves
Three more merchant ships were hit in the Gulf by unidentified bombs, according to maritime security watchdogs, bringing the number of ships reported hit since the war began to 14.
Crew members were evacuated from the Thai-flagged vessel after the explosion caused a fire. A container ship flagged from Japan and the Marshall Islands carrying a flagged bulk also sustained damage.
Oil prices, which briefly rose to $120 a barrel on Monday, have since settled around $90, suggesting that investors are betting that Trump will be able to stop the war and reopen the strait soon.
But governments are still discussing a more drastic measure. The International Energy Agency was expected to recommend the release of 400 million barrels from the world’s strategic reserves, which is a record.
That could have taken months and it took just three weeks to flow through the struggle.
Isreal says there is no time limit on the campaign
American and Israeli officials say their goal is to end Iran’s ability to use force outside its borders and destroy its nuclear program, although they have also called on Iranians to overthrow the country’s clerical rulers.
Israeli Defense Minister Israel Katz said on Wednesday that the operation “will continue without time limits, as long as necessary, until we achieve all objectives and win the campaign.”
But the longer the war continues, the greater the risk to the world economy, and if it ends with Iran’s clerical regime, Tehran will declare victory.
Iran’s police chief, Ahmareza Radan, said on Wednesday that anyone who takes to the streets will be considered “an enemy, not a protester.”
Iran has said it will not allow oil to pass through the crisis until the US-Israeli offensive ends, and will not negotiate. Trump has threatened to hit Iran “twenty times over” if it blocks the border, but US officials have not revealed any military plan to open it.
In Israel, pre-dawn fireworks from air defenses intercepted missiles. The Sirens sent the Israelites into shelters.
Israel also launched a crackdown on Beirut aimed at eliminating the Iranian-backed group Hezbollah, which has fired on Israel from Lebanon in coordination with Tehran.
More than 1,300 Iranian citizens have been killed since US and Israeli airstrikes began on Feb. 28, according to Iran’s UN ambassador, Amir Saeid Iravani. Dozens were also killed in Israel’s attack on Lebanon.
Iranian strikes on Israel have killed at least 11 people and two Israeli soldiers have died in Lebanon. Washington says seven US soldiers were killed and an estimated 140 wounded.
