US and Iranian forces engaged in direct attacks on vessels in waters around Iran on Saturday, with US Central Command striking three Iranian oil carriers including one off the coast of Kharg Island, near Iran's oil export hub. The exchange began after Iran's Islamic Revolutionary Guard Corps launched ballistic missiles at two US Navy ships, according to Business Standard. Admiral Brad Cooper, head of US Central Command, stated "Let the message to the IRGC be clear: If you shoot at two of our ships, we will impose an even higher economic cost - taking out three of yours." The IRGC responded by threatening intensified strikes against US military vessels in the region and targeting three tankers as well as three US-linked vessels in other areas, as reported by Business Standard. Tasnim, the semi-official Iranian news agency, reported that four US missiles hit a tanker in the area of Kharg's anchorage, with no casualties and the crew being evacuated. No American personnel were harmed in the US strikes, Central Command confirmed. The exchange follows an escalation in the past week that threatens to deepen a conflict that has continued since the US and Israel launched strikes on Iran in February.
President Donald Trump said renewed attacks on Iran would be short-lived, as oil steadied after a three-day rally that saw crude prices surge more than 8% over the past three sessions. Asked how long the US bombing campaign could continue, Trump said "I don't think too long," although the president added that "we're prepared to do another one any time we want." The latest developments come after US military forces conducted fresh strikes on Iranian targets overnight, targeting radar systems and mine-laying capabilities along Iran's southern coast. Brent crude closed at $96.28 a barrel on Friday, reaching its highest level since July 24, according to Business Standard. The benchmark is up around 58% this year, raising concerns about the economic impact as the Northern Hemisphere winter approaches.
US officials signaled robust energy flows through the Strait of Hormuz, with the American military escorting 40 vessels through the waterway on Tuesday carrying 18 million barrels of oil, according to CNN citing two officials familiar with the matter. Energy Secretary Chris Wright said 17 million barrels of oil exited the waterway on Monday, with flows averaging about 8 million barrels a day, as reported by Bloomberg. The US energy secretary said 17 million barrels of oil flowed through the strait on Monday, the highest volume since the conflict began, when you factor in bypass volumes, it suggests Persian Gulf oil flows are above pre-war levels. However, officials noted that these numbers are uncertain and make more sense to look at average flows over longer periods, given flows move lots day to day. The resumption of hostilities brought an abrupt end to a month of subdued military activity, during which oil shipments through the Strait of Hormuz recovered to roughly half of prewar levels, as reported by Business Standard. The improvement in flows risks being curtailed, affecting supplies of oil, gas and other commodities and boosting energy prices and inflation.
Iranian forces launched attacks toward Jordan, Bahrain and Kuwait, according to officials and Iranian state media, defying Trump's warning against retaliation. Iran's Revolutionary Guard said it targeted a US base along Jordan's Gulf of Aqaba coast, according to Iranian state television, with Jordan's military saying it intercepted 10 missiles, while three others landed in unpopulated areas. Explosions believed to be missile interceptions were seen over the Red Sea resort city of Aqaba. Iran also claimed that a US strike hit a wedding celebration in southern Iran, killing four people, including a young child, and wounding as many as 67, according to the Iranian Red Crescent Society, as reported by Business Standard. Tehran accused the US of hitting a wedding ceremony in the southern coastal city of Sirik, with the Iranian Red Crescent Society saying at least four people died and about 67 were injured, with the organization noting the total may rise. Iranian officials likened the incident to a strike on an elementary school in the city of Minab during the early days of the conflict, which killed an estimated 120 children and is under investigation by the US military. Iran's Foreign Ministry spokesman Esmail Baghaei posted on X, stating "This cruelty cannot be separated from the chain of atrocities that preceded it in Minab. Iran will respond to these savage crimes with firmness."
Crude oil futures traded higher after the US forces conducted fresh strikes on Iranian targets, with December Brent oil futures at $95.44, up by 4.23%, and October crude oil futures on WTI at $90.68, up by 0.51% as of 9:31 am on Wednesday. September crude oil futures were trading at ₹8610 on Multi Commodity Exchange (MCX) against the previous close of ₹8536, up by 0.87%, and October futures were trading at ₹8379 against the previous close of ₹8335, up by 0.53%. Crude prices are almost 60% higher this year, with refined products such as diesel rallying even harder due to the Middle East conflict and the Russia-Ukraine war, according to Bloomberg. Goldman Sachs has warned that Brent could rise to $120 a barrel if shipping disruptions through the Strait of Hormuz continue, as reported by The Economic Times. US crude inventories fell by 4.5 million barrels last week, the first decline since late July, according to Energy Information Administration figures, with stockpiles at the key storage hub at Cushing, Oklahoma, rising marginally to 22.5 million barrels.
While US President Donald Trump's administration seeks to pivot toward an economic clampdown on Iran by widening sanctions, the president himself has kept open the possibility of military action. On August 31, Trump issued a one-line social media post accompanied by an AI-generated video depicting Kharg Island being "blown to smithereens." Iranian authorities have vowed a strong response if Kharg is attacked. Iran is the third-largest producer in the Organization of the Petroleum Exporting Countries and exported 90% of its crude via Kharg Island before the war. Flows have been disrupted since a US blockade of Iranian oil exports began in mid-April, with the US imposing its blockade after Iran effectively shut the Strait of Hormuz, an important waterway that carried one-fifth of the world's oil supply before the war. A US attack on Kharg would further pressure Iran's oil industry and its wider economy, which is already reeling from the US naval blockade. The escalation of hostilities between the US and Iran this week is a concern, he added, according to Chevron Corp. CEO Mike Wirth. Fighting drags on with no end — and no winner — in sight, warned Bloomberg economists including Dina Esfandiary, noting that surging oil prices are taxing the global economy.
