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Iran warned on Wednesday that it could pursue a prolonged conflict with the United States and Israel that would “destroy” the global economy, while effectively shutting down passage through the Strait of Hormuz.
Facing political pressure over the war’s economic consequences, US President Donald Trump said the conflict would conclude “soon” and assured “great safety” for ships travelling through the strategic waterway.
Oil prices have surged since February 28, when the United States and Israel carried out air strikes on Iran, killing its supreme leader and pushing the Middle East into war.
The Strait of Hormuz carries around one-fifth of the world’s oil supply, and a combination of Iranian missile attacks and drone strikes has brought shipping in the corridor close to a standstill.
Governments across the world have rushed to stabilise markets, with members of the International Energy Agency agreeing to release a record 400 million barrels of oil from emergency reserves.
“This is a major action aiming to alleviate the immediate impacts of the disruption in markets,” IEA Executive Director Fatih Birol told reporters.
“But to be clear, the most important thing for a return to stable flows of oil and gas is the resumption of transit through the Strait of Hormuz.”
Despite the move, oil prices rose slightly after Tehran launched attacks on two commercial vessels in the Gulf, setting at least one ship ablaze.
During a visit to Ohio, Trump said US forces had struck 28 Iranian vessels involved in laying naval mines. He added that there was “practically nothing left to target” and that the war would end “soon”, according to an interview with Axios.
As the conflict entered its 12th day, Iran’s Islamic Revolutionary Guard Corps pledged to strike “economic centres and banks” linked to US and Israeli interests, prompting several international companies to evacuate staff from Dubai.
The US and Israel “must consider the possibility that they will be engaged in a long-term war of attrition that will destroy the entire American economy and the world economy”, adviser Ali Fadavi told state television.
Iran said it targeted the two vessels in the Gulf because they entered the Strait of Hormuz “after ignoring the warnings” of its navy.
Experts say a prolonged shutdown of the Strait, which also transports about a third of the fertiliser used in global food production, would severely damage the world economy, particularly in Asia and Europe.
The United Nations Security Council later adopted a resolution demanding that Iran immediately halt attacks on Gulf states. Iran’s actions have severely disrupted the Gulf’s energy production and aviation sectors. On Wednesday, drones landed near Dubai International Airport, injuring four people, authorities said.
