Iran war: Oil market on alert as Middle East conflict intensifies

Oil market analysts are on a razor's edge, following the weekend of sharp military escalation in the Middle East.

IMAGE: Flags of the US and Iran. Getty Images

Fears of a catastrophic regional conflict mount as a war of words between Washington and Tehran boils over, following stark warnings from US President Donald Trump that Iran risks being “wiped out” entirely.

Iran would “rot ‌economically”, if it didn't make a deal quickly, Trump said in an interview with Fox News.

In response, Iranian military said the country is prepared to retaliate severely to further escalations, Reuters reported.

Any fresh attack on Iran will automatically trigger retaliation against US bases in the region and ​Washington's allies will be considered parties to the conflict, the report added.

The ongoing war has remained in a deadlock for months now, with neither side willing to show any appetite for compromise.

So far, the US Central Command (CENTCOM) has redirected 109 commercial vessels, disabled more than three, and boarded two to prevent ships from entering or departing Iranian ports, it said.

“CENTCOM forces have supported more than 1 billion bbls of crude oil leaving the Gulf… through the Strait of Hormuz in the last couple months,” it further claimed on social media platform X.

UKMTO reports fresh vessel attacks

More commercial vessels have come under direct air assault within the Strait of Hormuz over the weekend, the United Kingdom Maritime Trade Operations (UKMTO) agency reported.

“The CSO of a vessel has reported a tanker being hit by an unknown projectile causing a fire onboard,” the UKMTO reported.

As of Friday, only six vessels attempted to transit the Strait of Hormuz – three inbound, three outbound – maritime intelligence provider Windward reported, as vessel traffic remains severely choked and well below the pre-war average of 140 daily transits.

The crisis has continued to widen – aggravating a global energy crunch and igniting dangerous new fronts across the region, market analysts said.

All eyes will be on New York this week, as Iranian President Masoud Pezeshkian arrives for the United Nations General Assembly (UNGA) summit.

There remains some hope “for constructive discussions at this week's UN General Assembly,” two analysts from ING Bank noted.

By Aparupa Mazumder

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