Oil sees historic disruptions as Iran escalates attacks on shipping

US Energy Secretary Chris Wright has a message for Americans: The high gas prices you’re paying now are a sacrifice you need to make that will pay off in the end.

Ebrahim Zolfaqari, spokesperson for Iran’s Islamic Revolutionary Guard Corps, told Reuters yesterday that the world should prepare for $200 oil, double its current price. Wright told CNN that $200 was “unlikely,” but said he refused to predict how high oil and gas prices could go.

“I would say unlikely, but we are focused on the military operation and solving a problem,” Wright said. “I’m not going to guess on short-term trading that’s based on psychology more than flows of oil.”

Wright noted that the United States remains by far the world’s largest oil-producing country.

Oil trades on a global market and other sources for crude exist around the world, so oil probably wouldn’t rise much higher than $150 a barrel even if the Strait of Hormuz were to remain closed for an extended period of time, according to Jay Hatfield, CEO and founder of Infrastructure Capital Advisors.

But $150 would surpass the all-time high set in 2008, which was a factor that led to the global financial crisis.

The Business Bay financial district of Dubai, United Arab Emirates, on March 4.

A growing number of large financial companies have told staffers to stay away from their offices in the Middle East amid Iran’s attacks on its Gulf neighbors.

Goldman Sachs has instructed employees across the region to work remotely and follow the advice of local officials, while Standard Chartered told CNN it was “maintaining normal client service under work-from-home arrangements.”

Most of Citi’s branches and financial centers in the United Arab Emirates will be closed from Thursday to Saturday as “a precautionary measure,” according to its website. Its branch in the Mall of the Emirates in Dubai remains open and it plans to reopen all affected locations on March 16.

The company has also moved to a fully remote model for all UAE-based employees and is continuing to serve clients without interruption, the spokesperson added.

In Qatar, HSBC informed its customers that it had temporarily closed all branches in the country until further notice.

The moves come a day after a Tehran military spokesperson said Iran would target regional economic centers tied to the United States and Israel in retaliation for their attack on an Iranian bank.

One of the buildings belonging to the lender, Bank Sepah, was struck in a missile attack early Wednesday, according to Iranian state media. The state-owned bank is believed to be connected to the Iranian military and Revolutionary Guard.

CNN’s Sophie Tanno, Josh Girsky and Mostafa Salem contributed reporting.

Gas prices edged up 2 cents a gallon in the latest reading from AAA, taking the average price to $3.60 a gallon, after one of the smallest daily increases in the recent run-up in gas prices.

Still, the average price has now climbed 35 cents in just the last week, and 65 cents in the last month, the largest weekly and largest monthly increases since early March 2022, soon after Russia’s invasion of Ukraine prompted widespread sanctions against that major oil-producing nation. This latest price is up 22% in the last month and is at the highest level since May 2024, more than 21 months ago.

This rise is a reaction to the war in Iran and the virtual closure of the Strait of Hormuz, a crucial channel through which 20% of the world’s oil normally passes, as well as retaliatory attacks by Iran on the oil facilities of its oil-rich neighbors such as the United Arab Emirates, Qatar, Kuwait and Saudi Arabia, the world’s largest oil exporter.

Steeper price hikes could be on the horizon. Oil prices tumbled 12% and wholesale gas prices 6% in trading Tuesday after President Donald Trump said the end of the war was “very near.” But attacks on ships near the strait sent prices higher once again on Wednesday and Thursday, with crude futures topping $100 a barrel in early trading today.

Iran’s new supreme leader, Mojtaba Khamenei, is set to release his first message in “a few moments,” according to Iranian state media.

Iran’s state news agency IRNA said the “strategic” message from Khamenei will be released in seven sections.

It said the address will contain information about Khamenei’s father Ayatollah Ali Khamenei, the former supreme leader who was killed in US-Israeli air strikes.

The message will also include, according to IRNA, information on “regional countries and confronting enemies” and well as on “the roles and duties of the people, the armed forces, executive institutions” and what Iran refers to as the “Axis of Resistance” — the group of Iran’s proxies in the wider region.

Energy Secretary Chris Wright said Thursday that the US Navy is currently unable to escort commercial vessels through the Strait of Hormuz, though he suggested that capability could be in place later this month.

“It’ll happen relatively soon, but it can’t happen now. We’re simply not ready,” Wright said during an interview with CNBC when asked whether the US Navy could escort a tanker through the strait.

The energy secretary explained that US military resources are currently focused elsewhere amid the war in Iran.

“All of our military assets right now are focused on destroying Iran’s offensive capabilities and the manufacturing industry that supplies their offensive capabilities,” he added.

When pressed on whether the Navy could begin escorting ships through the strait by the end of the month, Wright indicated that was likely. “I think, yes,” he answered. “I think that is quite likely the case.”

Wright suggested that preparations are already underway, saying, “that is that is what the military is working on.”

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The Mayuree Naree on fire in the Strait of Hormuz on Wednesday

00:45 • Source: CNN

The Mayuree Naree on fire in the Strait of Hormuz on Wednesday

00:45

Several vessels in the oil-rich Persian Gulf have been targeted in recent days as the US and Israel’s war with Iran spreads to the sea, sparking fears that disruption to the global oil supply could hit the world’s economy.

On Wednesday night, two foreign oil tankers in Iraqi waters were set ablaze by an Iranian attack, killing at least one person, with dozens of crew members rescued. Iran claimed responsibility, saying an underwater drone “blew up two oil tankers in the Persian Gulf,” Iranian state broadcaster IRIB reported.

Video shared with CNN captures the moment one of these tankers, named “MV Safesea Vishnu,” was struck. The footage was recorded from a nearby bulk carrier by seafarer Dennis Pialago, a Filipino national.

A second video, shot by Pialago on Thursday morning, shows the burned-out hull of the tanker listing in the water. In the video, the fire looks mostly out but there is still smoke emerging from the vessel.

Earlier Thursday, a container ship off the coast of the United Arab Emirates reported being struck by an “unknown projectile,” the UK Maritime Trade Operations (UKMTO) center said.

Danish shipping giant Maersk told CNN Thursday that a Liberia-flagged vessel called Source Blessing was involved in an incident in the Persian Gulf early morning local time. A fire broke out on board but has since been extinguished, with no reported injuries among the crew. Maersk said the vessel is “time-chartered” by the company, which means it sails on its behalf.

On Wednesday, UKMTO received reports that three other vessels were hit by projectiles near the Strait of Hormuz. One resulted in a fire onboard, resulting in some crew members being evacuating from the vessel, UKMTO said.

One of the vessels attacked on Wednesday was a Thai bulk carrier, with Thailand’s Ministry of Transport saying an explosion occurred at the stern causing a fire in the engine room.

CNN’s Hanna Ziady contributed reporting.

Iranian state media are reporting that the first message from Ayatollah Mojtaba Khamenei, the new supreme leader, will be released in “a few moments.”

Khamenei has not been seen in public or heard from since his election at the weekend.

We’ll bring you more as soon as we get it.

The number of people killed in Lebanon since the start of Israel’s latest escalation has hit 687, including 98 children, Lebanon’s Minister of Information Paul Morcos said on Thursday.

Among the dead are 15 medics and rescuers, Morcos said. Another 45 have been injured.

To put it simply, the Strait of Hormuz is one of the global economy’s key arteries, the passage through which oil tankers travel out of the Persian Gulf carrying around one-fifth of the world’s daily oil production.

The waterway is only 21 miles wide at its narrowest point, a quirk of geography that makes it relatively easy for Iran to control.

Under Iran’s near-total blockade of the strait, some 15 million barrels of crude oil and 5 million barrels of other oil products are choked off from the global markets every day, according to the director of the International Energy Agency (IEA).

And Gulf countries have cut total oil production by at least 10 million barrels per day, the IEA added, since they have few other ways to export their crude and their storage tanks are filling up.

That shortfall has already caused soaring oil prices, which have spiked at over $100 barrel and remain much higher than before this war started, as investors grapple with supply concerns.

Further attacks on vessels attempting to navigate the strait yesterday spooked traders, causing oil prices to rise again.

“The war in the Middle East is creating the largest supply disruption in the history of the global oil market,” the IEA said in its monthly oil market report.

Ukrainian President Volodymyr Zelensky attends a meeting in Kyiv on Wednesday.

Ukrainian President Volodymyr Zelensky said Thursday he hopes the US will reconsider a drone production deal amid its war in Iran.

“We wanted to sign a big drone production deal with the United States, but we needed the approval from the White House,” Zelensky wrote on X, adding that the drones would be effective against Iranian shahed drones and missiles.

“We didn’t have the opportunity to sign this document yet,” Zelensky continued in the post. “I hope that maybe American friends will be closer to this decision now, especially after such challenges as we see in the Middle East.”

Ukraine has been improving its defense against Iranian-designed shahed drones, which Russia has used in the war between the two countries. It attempted to sell its technology to the US last year, but the effort was dismissed, according to Axios.

However last week, the US asked for Ukraine’s help, Zelensky told The New York Times, and Kyiv has provided interceptor drones and experts to help defend US bases in Jordan.

Ukrainian officials showed the Trump administration a presentation in August that outlined how its technology could protect US forces and proposed creating “drone combat hubs” in Turkey, Jordan and Persian Gulf states where US military bases are located, according to Axios.

“We figured it was Zelensky being Zelensky,” a US official told Axios, describing Zelensky as someone who is thought to be a self-promoter. “Somebody decided not to buy it.”

CNN has reached out to the White House for comment.

CNN’s Alejandra Jaramillo contributed to this report.

The International Energy Agency (IEA) warned that the war in the Middle East is causing the “largest supply disruption in the history of the global oil market,” as US President Donald Trump has repeated his claim the US has won the war despite the conflict expanding.

Here’s what you need to know:

Switzerland has temporarily closed its embassy in Tehran due to the war in the Middle East and rising security risks, the Swiss foreign ministry said on Wednesday. The embassy represents US interests in Iran.

The US severed diplomatic relations with Iran in 1980, following the seizure of the American embassy in Tehran and the subsequent hostage crisis. Switzerland has served as the protecting power for US interests in the decades since.

“Due to the attacks by the US and Israel against Iran and Iran’s attacks on various countries in the Middle East, the security of staff at the Swiss embassy in Tehran can no longer be guaranteed,” the foreign ministry said in a statement, noting that the Swiss ambassador and all remaining embassy staff left Iran by land on Wednesday.

“Switzerland will continue to be available to channel communications that the parties consider useful. The protecting power mandate, under which Switzerland represents US interests in Iran, can be exercised independently of geographical location,” the foreign ministry said.

“Both the US and Iran were informed of the temporary closure of the embassy and the departure of the Swiss staff,” the statement added.

The US Embassy in Bern issued a statement in response, saying that it respects the Swiss government’s decision and that Switzerland’s “vital work remains essential to protecting US interests and supporting our citizens.”

Up to 3.2 million Iranians have been forced to flee their homes, the UN refugee agency (UNHCR) said on Thursday, warning the figure would likely rise as the conflict continues.

Most have reportedly left Tehran and other major cities to seek safety in the north of the country and in rural areas, it said.

“This figure is likely to continue rising as hostilities persist, marking a worrying escalation in humanitarian needs,” UNHCR Director Ayaki Ito said in a statement.

The UNHCR said refugees in Iran, mostly Afghans, were particularly vulnerable given their limited access to support networks in the country.

There is an urgent need to protect civilians and ensure that borders remain open to those seeking safety, it said.

CNN’s Issy Ronald contributed to this reporting.

Iranian President Masoud Pezeshkian delivers remarks during a cabinet meeting in Tehran, Iran, on February 15.

Iranian President Masoud Pezeshkian on Wednesday evening laid out three demands to end the war, including “recognizing Iran’s legitimate rights, payment of reparations, and firm international guarantees against future aggression.”

It was the first time the president had publicly outlined specific conditions for ending the conflict.

“The only way to end this war—ignited by the Zionist regime & US—is recognizing Iran’s legitimate rights, payment of reparations, and firm int’l guarantees against future aggression,” he said in a post on X.

As Iran continued retaliating against regional economic and military targets, the president said he had spoken to the leaders of Russia and Pakistan to reaffirm Iran’s “commitment to peace.”

Pakistani Prime Minister Shehbaz Sharif traveled to Saudi Arabia for a brief visit on Thursday, his office said.

Sophia Saifi contributed reporting.

Israel’s Defense Minister Israel Katz has instructed the military to prepare for expanding operations in Lebanon after the Iran-backed militant group Hezbollah fired a barrage of rockets at Israel.

Israel has already issued vast evacuation orders in southern and central Lebanon, forcing hundreds of thousands of people to abandon their homes amid intense fighting along the border.

Iran’s Islamic Revolutionary Guard Corps said it carried out a joint attack with Hezbollah on Israel, targeting more than 50 targets across five hours of sustained fire on Wednesday.

Katz said today that he had warned Lebanese President Joseph Aoun that if his government does not stop Hezbollah from firing toward Israel that “we will take the territory and do it ourselves.”

An oil tanker smoulders after catching fire in Iraq's territorial waters following an attack by Iran.

As fresh attacks target vessels in the Persian Gulf and energy sites in the region, the International Energy Agency said today that the war in the Middle East is causing the “largest supply disruption in the history of the global oil market.”

The flow of crude and oil products through the Strait of Hormuz – ordinarily the conduit for around a fifth of daily global oil production – has reduced to “a trickle,” the IEA said in its monthly oil report. The agency called the waterway, which links the Persian Gulf with the Gulf of Oman and the Arabian Sea, “the world’s most critical oil transit chokepoint.”

As Gulf countries have few other ways to export their crude and with their storage tanks filling up, those nations have cut total oil production by at least 10 million barrels per day, the report said, warning that in the “absence of a rapid resumption of shipping flows, supply losses are set to increase.”

The IEA also projected that global oil supply would plunge by 8 million barrels per day this month, with output cuts in the Middle East partly offset by higher production from producers elsewhere.

Children in the United Arab Emirates are more accustomed to fireworks lighting up the sky than the sound of missile interceptions overhead. So when Iran launched a large-scale missile attack on the country late last month, parents tried to calm their children by saying the eerie sounds were fireworks.

The explanation didn’t last long. Schools have since moved online and Spring Break has been brought forward by a week. Families that haven’t left the country are keeping their children indoors.

For Zoya, an 11-year-old Emirati girl, the physical symptoms of anxiety appeared almost immediately.

In the capital Abu Dhabi, Omar, 6, was playing outside when he heard a loud sound and ran inside. The French-American boy told CNN through his mother Didi that he is no longer a fan of “fireworks.”

His 5-year-old sister, Yaari, reaches for the door every time a missile interception occurs, confusing it for a knock.

The anxiety is likely to be short-lived provided the situation doesn’t persist or intensify, a Dubai-based child psychologist said.

“Kids who experience a kind of intermittent anxiety will bounce back quickly,” Ross Addison told CNN. “Once the threat is gone, the anxiety is gone.”

Since the start of the war, Abu Dhabi’s Department of Health started a 24/7 mental health support hotline called “SAKINA” – Arabic for serenity – which has received over 500 calls, including from children seeking help.

A satellite image shows an oil terminal at Kharg Island, Iran, on February 25.

Any US aggression against Iranian islands across the Persian Gulf will trigger Iran to “abandon all restraint,” Iranian ⁠Parliament Speaker Mohammad Baqer Qalibaf said on X on Thursday.

The speaker’s message contained a stark warning that Iran will “make the Persian Gulf run with the blood of invaders,” should the islands be targeted.

Several Iranian islands, including Kharg Island, are key energy export terminals, while others hold Iranian military bases.

Three small Iranian-controlled islands sitting at the entrance of the Strait of Hormuz, one of the world’s most vital shipping routes, have also come into focus. Abu Musa and the Tunb Islands have for decades been at the center of a territorial dispute between Iran and the United Arab Emirates; their position means that whoever controls them has powerful leverage over global energy flows.

CNN’s Adam Pourahmadi contributed to this post.

At least 10 “security defenders” were killed in Israeli drone strikes targeting Basij and IRGC checkpoints in Tehran, according to Iran’s state-affiliated Fars News Agency.

Such checkpoints are scattered across Tehran, administered by the revolutionary guards and the Basij, a volunteer paramilitary group tasked with enforcing Islamic morality among the public and propping up the regime.

Basij volunteers are often plucked from poorer, conservative backgrounds and are often ideologically driven. They are typically on the frontlines of suppressing internal unrest, including during the protests earlier this year.

CNN has contacted the Israel Defense Forces (IDF) for comment.

Kuwait’s international airport was hit by several drones on Thursday morning, leading to material damage, the country’s civil aviation authority said.

No injuries were reported in the attack, the authority said in a statement carried by state news agency KUNA. The country’s airspace is currently closed due to the war with Iran.

The announcement comes shortly after Iran launched a new wave of retaliatory attacks on energy supplies in the region, with strikes on two foreign oil tankers in Iraqi waters.

Elsewhere, emergency crews in Oman are battling a fire at fuel storage tanks, while Bahrain also said Iranian attacks targeted fuel tanks in the country early Thursday local time.