Energy markets were staring into an abyss on Saturday as analysts warned that oil prices, already at $120 per barrel, could surge toward $150 if the US-Iran conflict continued on its current trajectory. The combination of Iran’s sustained closure of the Strait of Hormuz, US strikes on Kharg Island, and Iranian missile attacks on the UAE’s Fujairah oil port had created a multi-pronged threat to global energy supply chains unlike anything seen in decades. At $150 per barrel, economists warned, the world would face inflation shocks, potential recessions, and severe hardship in oil-importing developing nations.
The Strait of Hormuz, closed by Iran since the war began on February 28, carries roughly 20 percent of global daily oil and gas. Kharg Island, the target of US airstrikes on Friday and again Saturday, handles the vast majority of Iran’s crude exports. Fujairah, hit by Iranian ballistic missiles on Saturday, is one of the world’s most important ship-refuelling hubs. All three were simultaneously under threat, creating a scenario that energy security experts had long feared but hoped would never materialise.
President Trump said in public remarks that Kharg Island had been effectively demolished and called on China, France, Japan, South Korea, and the UK to send warships to the Strait of Hormuz. He threatened to destroy Iran’s remaining oil infrastructure if Tehran did not reopen the strait. Analysts noted his call for allied warships was the first public admission that the US might not be able to force the waterway open alone. Trump simultaneously ruled out negotiations with Iran, saying the terms were not yet acceptable.
Iran showed no sign of yielding. Its military threatened strikes on any Gulf energy facility with American ties. Ballistic missiles struck Fujairah, sending smoke over the emirate. Iranian commanders warned civilians to evacuate. Israel conducted dozens of raids inside Iran, killing at least 15 people in Isfahan. Iran fired rockets at Israel in return. US Defence Secretary Pete Hegseth claimed Iran’s leaders were in hiding and wounded. Iranian officials disputed the severity of the supreme leader’s injuries. The regime, analysts said, remained intact and determined.
The human cost of the conflict added urgency to the economic alarm. More than 1,400 Iranians had been killed in sustained bombing. Thirteen Israelis and roughly 20 Gulf residents had died. Lebanon’s crisis continued, with 800 killed and 850,000 displaced from Israeli strikes on Hezbollah. Six US troops died in an aircraft crash in Iraq. The US embassy in Baghdad was struck, and Americans were ordered to leave. With no talks under way and every pressure point in the global energy system under threat, markets had every reason for fear.