TRADE SHIPS HIT AS IRAN THREATENS GULF OIL CHOKEPOINT

Oil prices climbed by more than five percent in early trading as the conflict deepened. Global markets have been unstable since late last month when the United States and Israel launched attacks on Iran, reportedly killing its supreme leader and escalating the crisis in the Middle East.

As the war entered its twelfth day, Iran’s military warned that it would target economic facilities and financial institutions connected to US and Israeli interests. Attention has now shifted to the Strait of Hormuz, a key route for global energy shipments.

Leaders of the Group of Seven countries are expected to hold a virtual meeting later on Wednesday to discuss releasing oil from their strategic reserves in an effort to stabilise prices. Earlier, energy ministers from the group said they were prepared to take necessary steps in cooperation with the International Energy Agency.

Japan has also indicated that it may release oil from its reserves as early as Monday, according to Prime Minister Sanae Takaichi, even before a formal decision is made by the agency.

Experts warn that if the Strait of Hormuz is blocked for a long period, the consequences for the global economy could be severe. The route carries about 20 percent of the world’s oil and gas supply, as well as a large share of fertiliser used in global food production.

On Tuesday, the US Department of Defense said American forces destroyed 16 vessels believed to be capable of laying mines that could block the strait. However, attacks continued on Wednesday, with drones or missiles reportedly striking at least three ships.

US President Donald Trump warned that if mines were placed in the waterway and not removed quickly, Iran would face serious military consequences.

Meanwhile, Turkey’s President Recep Tayyip Erdogan has urged the sides involved in the conflict to agree to a ceasefire. Iranian leaders have so far rejected the proposal.

Israel also announced that it had launched a new wave of large-scale strikes in Iran and against Hezbollah targets in Beirut, the capital of Lebanon.