Israel-Iran Conflict: Strikes, Energy Prices, and Global Risk

DUBAI, United Arab Emirates (AP) — Israel launched airstrikes against Tehran on Friday as Iranians marked Nowruz, the Persian New Year, amid a war that has sent ripples through the global economy and raised the specter of wider regional conflict. Explosions were reported around the Iranian capital, according to activists, a day after Israel pledged to refrain from further attacks on a key Iranian gas field and Iran intensified strikes on energy facilities in the Gulf.

Heavy explosions shook Dubai early Friday as air defenses intercepted incoming fire over the city, where residents were observing Eid al-Fitr, the conclude of Ramadan. Iranian attacks continued, triggering sirens across northern Israel, from Haifa to the Galilee and the border with Lebanon. Israel’s military reported more than a dozen missile launches on Thursday alone.

Global fuel supplies are under significant pressure due to Iran’s strategic position controlling the Strait of Hormuz, a vital waterway for approximately 20% of the world’s oil transport. Brent crude oil briefly surpassed $119 a barrel, a surge of more than 60% since the conflict began, while European natural gas prices have roughly doubled in the past month.

In a move seemingly aimed at de-escalation, Israeli Prime Minister Benjamin Netanyahu stated late Thursday that, at the request of U.S. President Donald Trump, Israel would suspend further attacks on Iran’s offshore South Pars gas field. Although, Iranian retaliatory strikes have already led to calls from Gulf allies for Trump to restrain Netanyahu, as energy prices continue to climb.

Since the conflict began on February 28, Iranian leaders have been killed and the country’s military capabilities have been significantly degraded, according to Netanyahu. He claimed Iran is no longer capable of enriching uranium or producing ballistic missiles, though he provided no supporting evidence. Despite these claims, Iran – now led by the son of its supreme leader, who was killed in the initial stages of the war – remains capable of launching missile and drone attacks.

The United Nations Security Council held an emergency closed-door meeting Thursday, during which Gulf countries urged Iran to cease attacks on their territories, according to Bahrain’s U.N. Ambassador Jamal Alrowaiei. Iran has shown no indication of backing down. Saudi Arabia reported damage to its SAMREF refinery in Yanbu, and has begun increasing oil shipments westward through the Red Sea to bypass the Strait of Hormuz.

Qatar, a major exporter of natural gas, stated that Iranian missiles caused extensive damage to the Ras Laffan liquefied natural gas facility, reducing its exports by approximately 17% and resulting in an estimated $20 billion in annual lost revenue. Repairing the damage is expected to take up to five years, even though production at the facility had already been halted following earlier attacks. Oil refineries in Kuwait and gas operations in Abu Dhabi were as well targeted by Iran, authorities reported.

The dangers to maritime traffic in the region were underscored by a vessel set ablaze off the coast of the United Arab Emirates and another damaged near Qatar. Attempts to circumvent the Strait of Hormuz have also been disrupted, with an Iranian drone striking a Saudi refinery on the Red Sea.

The UAE announced Friday that it had disrupted a “terrorist network” funded and operated by Lebanon’s Hezbollah and Iran, arresting its operatives. Authorities accused the men of laundering money under the guise of a commercial enterprise, with the intent of undermining the country’s financial stability. Images of five prisoners were released by the state-run WAM news agency, but their identities were not disclosed.

Netanyahu asserted that Iran’s air defenses have been neutralized, its navy has been largely destroyed, and its air force decimated. He expressed hope that the Iranian people would rise up against the Islamic Republic, which has ruled for nearly half a century. However, there has been no sign of organized opposition since the war began, following a crackdown on mass protests in January.

Netanyahu’s comments came amid challenges for both Trump and himself, including the resignation of a top U.S. Intelligence official who alleged that Israel pressured Trump into initiating the war, and criticism of Israel’s attacks on South Pars, which triggered Iran’s retaliatory strikes on regional energy infrastructure.

“I misled no one,” Netanyahu said. “And I didn’t have to convince President Trump about the need to prevent Iran from developing its nuclear program.” Iran has consistently maintained that its nuclear program is for peaceful purposes, despite enriching uranium to 60% purity, a level close to weapons-grade. That stockpile of highly enriched uranium remains in Iran.

U.S. General Dan Caine, chairman of the Joint Chiefs of Staff, stated that U.S. Forces are conducting deeper strikes within Iran, with warplanes targeting Iranian vessels in the Strait of Hormuz and deploying 5,000-pound bombs against underground weapons storage facilities. Trump, however, has stated he will not deploy ground troops to Iran.

Iran condemned Israel’s attack on South Pars, the world’s largest gas field, shared with Qatar. With natural gas generating approximately 80% of Iran’s power, according to the International Energy Agency, the attack threatens the country’s electricity supply. Trump warned on social media that if Iran continues to strike Qatar, the U.S. Would “massively blow up the entirety” of the field.

More than 1,300 people in Iran have been killed during the war. Israeli strikes against Hezbollah in Lebanon have displaced over 1 million people, according to the Lebanese government, with more than 1,000 fatalities reported. Israel claims to have killed over 500 Hezbollah militants. Fifteen people have been killed in Israel by Iranian missile fire, and four more were killed in the occupied West Bank.

At least 13 U.S. Military members have been killed.