Donald Trump
Tosin Ogunrinde
Iran and the US are threatening attacks on each other’s oil facilities, escalating tensions in West Asia. Iran warned it would reduce US-linked oil facilities to “a pile of ashes” if the US strikes its oil infrastructure, after President Donald Trump said he may “wipe out” Iran’s largest oil export hub on Kharg Island.
The conflict has pushed oil prices up by over 40%, disrupting shipping in the region. The US has already struck military targets on Kharg Island, sparing oil infrastructure for now. Iran’s military responded, saying oil and energy infrastructure owned by US-linked firms would be “immediately destroyed and turned into a pile of ashes” if the US strikes its oil facilities.
The US and Israeli attacks have killed over 1,200 people in Iran, according to health ministry figures. Tehran has also squeezed the world economy by threatening to strike oil tankers on the Strait of Hormuz, bringing traffic to a virtual halt on a route that normally carries one-fifth of global oil supplies.
Iran’s strategy is to pressure oil flows and inflict asymmetric attacks on US assets stationed across the region, rather than engaging in direct confrontation. The country has devised its own weapon: holding the world’s main oil lifeline hostage to offset its foes’ military superiority.
The conflict has disrupted approximately 20% of global oil supplies, causing prices to rise from around $70 to over $110 per barrel. The oil production of Kuwait, Iraq, Saudi Arabia, and the United Arab Emirates has collectively dropped by 6.7 million barrels per day.
The US has deployed more Marines and naval forces to the area, while Iran warns of retaliatory strikes. The conflict has also drawn in other countries, with Qatar intercepting missiles and Saudi Arabia intercepting drones.
The economic impact is significant, with stock markets in Asia taking a hit and US stock futures suffering losses. The International Monetary Fund estimates that sustained oil price increases could lead to higher inflation and slower economic growth.
Iran’s economy, already strained by sanctions, faces further infrastructure damage and revenue losses. The country’s new Supreme Leader, Mojtaba Khamenei, has vowed to keep the Strait of Hormuz closed, threatening global oil supplies.
The situation underscores the delicate balance between geopolitical stability and energy security. As the conflict continues, the potential for further disruptions and the impact on global energy supplies remain uncertain.
