Oil Shock Threat: Iran Warns Crude Could Hit $200 as Gulf Tensions Rise
Iran attacks merchant ships and threatens $200 oil as war with U.S. and Israel escalates, raising fears of a historic energy shock and global supply disruption.
Iran warned Wednesday that global oil prices could soar to $200 per barrel after its forces fired on merchant ships in the Persian Gulf, escalating the conflict triggered by U.S. and Israeli airstrikes nearly two weeks ago and threatening a major disruption to global energy supply. The attacks targeted vessels that Tehran said had ignored military orders, raising fears about shipping safety in the Strait of Hormuz, one of the world's most critical oil transit corridors.
The warning came as tensions across the Middle East intensified and policymakers scrambled to contain the economic fallout. The International Energy Agency recommended the largest release of strategic oil reserves in history, while the United States signaled it would draw from its Strategic Petroleum Reserve to stabilize prices.
Iran's Revolutionary Guards confirmed that their forces fired on several commercial vessels in Gulf waters, part of a widening confrontation that is already disrupting maritime trade routes and energy transport.
At least three ships were struck on Wednesday, including a Thai-flagged bulk carrier that caught fire and forced the evacuation of its crew. Two other vessels - a Japanese container ship and a Marshall Islands-flagged bulk carrier - also reported damage from projectiles.
The latest incidents bring the number of merchant vessels hit since the war began to 14 ships, underscoring the growing risks to commercial shipping in the region.
The situation is particularly critical around the Strait of Hormuz, a narrow channel along Iran's southern coast through which roughly one-fifth of global oil supply normally flows. Despite U.S. assurances that Iranian naval capacity has been severely degraded, shipping companies and security sources say the route remains effectively blocked, with reports that mines have been deployed in the waterway.
Trump vows to "finish the job" as war drags on
Speaking at a political rally in Kentucky, U.S. President Donald Trump said American forces had destroyed dozens of Iranian naval vessels but indicated the conflict was not yet over.
"We got to finish the job," Trump told supporters, suggesting Washington would continue military operations rather than withdraw prematurely.
Trump also said the United States had neutralized much of Iran's military capability, claiming the country now lacks effective naval and air power. However, Iranian forces continue to launch missiles and drones across the region, targeting locations in Israel and Gulf states.
U.S. intelligence agencies have also warned of potential Iranian drone threats, including possible attempts to strike targets on the American West Coast, according to reports from U.S. media.
Energy markets have already reacted sharply to the escalating conflict. Oil prices surged earlier this week to nearly $120 per barrel, before retreating toward $90 amid volatility driven by fears of supply disruptions.
Iranian officials signaled that the country intends to weaponize the global energy market.
"Get ready for oil to be $200 a barrel," said military spokesperson Ebrahim Zolfaqari, arguing that energy prices depend on regional stability that has been shattered by the conflict.
To mitigate the shock, the International Energy Agency recommended releasing 400 million barrels of oil from strategic reserves, a move that would represent the largest coordinated intervention ever in global energy markets.
The United States quickly endorsed the plan. Energy Secretary Chris Wright said Washington will release 172 million barrels from the U.S. Strategic Petroleum Reserve starting next week, hoping to ease pressure on fuel prices and global supply chains.
Even so, analysts warn the reserves would replace only a fraction of the oil that normally moves through the Strait of Hormuz, meaning prolonged disruption could push prices sharply higher.
Beyond the energy market, the war has already caused widespread regional instability. Drone and missile strikes have hit cities, ports and energy infrastructure across the Middle East, while large funerals in Iran have drawn massive crowds after senior military commanders were killed in airstrikes.
Iranian leaders have warned that economic and trade centers across the region could become "legitimate targets" if attacks continue, raising fears that banks, infrastructure and shipping networks could be drawn further into the conflict.
With shipping lanes threatened, oil markets volatile and geopolitical tensions rising, the crisis is shaping up to become one of the most severe global energy shocks since the 1970s oil embargo.
