Global Energy Shock Looms as Iran Targets Ships and Warns Oil Could Surge to $200 a Barrel

By Elsie Kamsiyochi

Tensions in the Middle East escalated sharply on Wednesday as Iran warned that global oil prices could soar to $200 per barrel, while Iranian forces reportedly fired on merchant ships in the Gulf.

The developments come as the ongoing war involving Iran, the United States, and Israel threatens to disrupt global energy markets and international shipping routes.

According to Iranian officials, the rising instability in the region could trigger a massive surge in oil prices if the conflict continues to intensify. The warning came after multiple merchant vessels were struck in Gulf waters, raising fears that vital maritime trade routes could become increasingly dangerous.

The conflict, which began nearly two weeks ago following coordinated airstrikes by U.S. and Israeli forces on Iranian targets, has already claimed around 2,000 lives, most of them in Iran and Lebanon. The fighting has expanded beyond its initial fronts, with missile strikes, drone attacks, and retaliatory bombardments spreading across the region.

Attacks on Ships Raise Alarm in Global Shipping

On Wednesday, three merchant ships were reportedly struck by projectiles in the Gulf after Iran’s Revolutionary Guards said they had targeted vessels that ignored military warnings. One of the vessels, a Thai-flagged bulk carrier, caught fire after being hit, forcing crew members to abandon the ship. Rescue teams believe three sailors may still be trapped in the engine room.

Two other ships — a Japanese-flagged container vessel and a Marshall Islands-flagged bulk carrier — also sustained damage. These incidents bring the total number of commercial ships hit since the war began to fourteen, underscoring the growing danger facing international shipping in the region.

The attacks have intensified concerns over the safety of the Strait of Hormuz, one of the most strategically important waterways in the world. Roughly one-fifth of the world’s oil supply passes through the narrow channel along Iran’s southern coast.

Sources have indicated that Iran may have deployed sea mines in the strait, further complicating navigation and effectively tightening a blockade that is already sending shockwaves through global energy markets.

Oil Markets React to Escalating Conflict

Oil prices have swung wildly since the conflict erupted. Earlier this week, crude surged to nearly $120 per barrel before falling back toward $90 as investors speculated that the conflict might soon de-escalate.

However, renewed attacks on shipping pushed prices up again by more than 4% on Wednesday amid fears that the flow of oil through the Gulf could be severely disrupted. Stock markets also reacted nervously, with major U.S. indexes declining as investors assessed the potential economic fallout.

The International Energy Agency (IEA), which represents major oil-consuming nations, has proposed releasing approximately 400 million barrels from global strategic petroleum reserves. If implemented, it would represent the largest coordinated release of emergency oil supplies in history.

The move aims to stabilize markets and prevent an even sharper surge in fuel costs. Yet analysts warn that such reserves could only offset a portion of the oil normally transported through the Strait of Hormuz.

Iran Threatens Wider Economic Retaliation

Iranian military officials signaled that their response to the war could expand beyond military targets. Ebrahim Zolfaqari, a spokesperson for Iran’s military command, warned that the United States and its allies should prepare for severe economic consequences.

He said that oil prices could reach $200 per barrel due to regional instability, blaming Western powers for destabilizing the region.

Iran also threatened to strike economic and financial infrastructure linked to the United States and Israel. Following damage to a bank building in Tehran during overnight airstrikes, Iranian officials warned that banks doing business with Washington or Israel could become targets.

Authorities even advised civilians across the region to stay at least 1,000 meters away from banks, suggesting that financial institutions might become future targets in the escalating confrontation.

Fighting Continues Despite Political Signals

Despite the intensifying hostilities, U.S. President Donald Trump suggested that the campaign against Iran could soon come to an end. In a telephone interview with Axios, Trump said that there was “practically nothing left” to target in Iran and indicated the operation could be concluded whenever he decided.

However, Israeli officials offered a different perspective, saying their military still has a large list of strategic targets in Iran, including ballistic missile facilities and nuclear-related sites.

Israel’s Defence Minister Israel Katz stated that the operation would continue without any time limit until all military objectives had been achieved.

Unrest and Loss Inside Iran

Inside Iran, large funeral processions have taken place for senior commanders killed in the airstrikes. Thousands of mourners gathered in the streets carrying coffins, flags, and portraits of the country’s slain leadership.

Iranian officials also revealed that Mojtaba Khamenei, the son and successor of the late Supreme Leader Ayatollah Ali Khamenei, was slightly wounded earlier in the conflict during the airstrikes that killed several members of his family. Since the war began, he has not appeared publicly or issued any direct address.

Meanwhile, residents of Tehran say they are gradually adjusting to the constant sound of nightly airstrikes. Hundreds of thousands of people have reportedly fled the capital for rural areas, while thick black smoke from burning oil facilities has polluted parts of the city.

Growing International Concern

The expanding conflict has triggered alarm across the Middle East and beyond. Countries including Turkey and several European governments have called for an immediate ceasefire, warning that the war could drag the entire region into a wider crisis.

For now, the situation remains volatile. With shipping under threat, oil markets on edge, and no clear diplomatic breakthrough in sight, the conflict is increasingly being seen not only as a regional war but as a potential trigger for a global economic shock.

Source Reuters