Iran has launched missiles towards US targets in Jordan after the US military destroyed five Iranian oil tankers on Tuesday in response to attacks on its warships. Iran's Revolutionary Guards said they had also targeted two US destroyers and what they described as a US base in Jordan's Al Azraq with ballistic missiles, according to The Times of India. However, Jordan's air-defence systems intercepted 18 of the 20 missiles launched from Iranian territory, while the other two landed in unpopulated areas. The latest attack on Muwaffaq Salti Air Base overnight Tuesday into Wednesday resulted in multiple American military aircraft being damaged, with an A-10 Thunderbolt left with a missing wing and around eight F-15 fighter jets sustaining light damage, as reported by CBS News. No American casualties were reported from the strikes on the base, which hosts US forces alongside the Royal Jordanian Air Force. This represents a significant escalation from previous attacks, with the latest exchange of strikes pushing the conflict into another phase of escalation and bringing the two sides back towards open hostilities.
Gulf foreign ministers are set to meet Iran in Oman as regional powers seek a temporary arrangement to manage shipping through the strategically vital Strait of Hormuz, according to Financial Times reports. The gathering is scheduled to be held on Monday in the Omani coastal city of Salalah, with the meeting aimed at securing buy-in for a temporary deal to manage shipping through the critical waterway. Iran and Oman are reportedly close to finalizing a deal to manage shipping through the Strait of Hormuz, with Iranian officials indicating the accord is imminent and will include a temporary safe route through the waterway. This development comes after Iranian Parliament Speaker Mohammad Baqer Qalibaf threatened to retaliate against any new U.S. attacks on its assets, warning that energy infrastructure across the Gulf, including U.S. oil and gas interests, was vulnerable. The deal would involve Iran and Oman seeking to formalize control of the strait, and could eventually charge transit fees, raising questions about how the U.S. would respond after it struck Iranian tankers over the weekend.
Oil prices jumped for the fourth straight session, gaining more than $1 in early trade on Wednesday as renewed tensions between US-Iran continue to rattle the crude market. Brent crude futures rose $1.57, or 1.6%, to $99.49 a barrel by 0001 GMT, while U.S. West Texas Intermediate crude was at $94.63 a barrel, up $1.60, or 1.72%, as reported by The Economic Times. Brent crude prices have jumped by a quarter since early August as hopes for a permanent resolution to the six-month-old war faded and as fighting flared again. Goldman Sachs has raised its Brent and WTI price forecasts by $5 to $85 and $80 a barrel, respectively, for December 2026, with 2027 forecasts raised to $80 and $75, respectively, as reported by Upstox. President Trump has predicted that oil prices will drop significantly below $2 per gallon after the war with Iran concludes, stating "Oil prices will drop precipitously, like everything else is dropping (but more!), when we WIN the war with Iran. Three Dollars a gallon, but ultimately, below Two Dollars a gallon."
The maritime conflict has significantly impacted shipping through the Strait of Hormuz, with roughly 7 million barrels a day of crude and refined fuels crossing Hormuz, according to Macquarie Group Ltd. citing conversations with clients, compared to pre-war levels of about 20 million barrels per day. Despite the disruptions, oil continues to exit the Persian Gulf, with US officials repeatedly pointing to robust exports, though the situation remains fluid as the Iran-Oman deal negotiations advance. The latest threat comes after U.S. forces struck three Iranian oil tankers on Saturday, including one near Kharg Island, Iran's main oil export hub, according to U.S. Central Command. The attacks followed strikes by Iran's Revolutionary Guards on U.S. warships operating in the region. Rezaei said the new restricted zone would begin where a U.S. naval blockade of Iran starts and extend into parts of the Gulf, with any vessel entering the area placed on an Iranian sanctions list. As per Rystad Energy's Jorge Leon, "OPEC+ currently has very limited power over the physical oil market" - the group can alter production targets but cannot guarantee that additional barrels will actually be produced or reach the market.
The oil market faces a sharp decline in global inventories outside China, with reserves down more than 400 million barrels since the war began, according to Energy Aspects, an oil market research firm. Commodity funds are turning bullish as reserves near a tipping point, adding to the pressure whipsawing Wall Street. Hamidreza Azizi, an Iran analyst at the International Crisis Group, noted that Tehran likely wants calibrated escalation, not full-scale war, which could mean pressure on shipping, US bases, or energy sites. He warned that miscalculation, not intent, is now the biggest risk of a wider war. The seven core OPEC+ members, including Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman, met on Sunday and decided to maintain the group's existing oil output policy for October. However, Saudi Aramco's oil facilities in Jazan near the Red Sea came under fresh attack on Monday, although the strike didn't cause major damage, according to people familiar with the matter, representing the latest in a series of attacks that have already forced a major refinery in the area to halt operations.
The oil-linked stocks sector declined during Monday trading, with the Nifty Oil & Gas index falling 0.41% to an early market low of 11,141.40 points, compared to 11,187.65 points at the previous equity market close. As reported by market sources, the broader benchmark equity indices were also trading lower due to cautious sentiment among investors, with elevated oil prices and IT stocks dragging the overall market losses intraday. Traders and industry executives are gathering in Singapore for the Asia Pacific Petroleum Conference, which kicks off on Tuesday, with key topics likely to include restricted crude flows through Hormuz, tightening global inventories and China's demand outlook. Priyanka Sachdeva, head of market insights at Phillip Nova, noted that "If tanker traffic begins to slow materially, the market could price in a much larger supply shock. And there are already signs that this is happening." ANZ analysts noted that "a return to pre-war throughput was not expected until late in the first quarter or early in the second quarter of 2027," with exports to remain constrained through the rest of 2026 before a gradual reopening late in Q4 2026.
