Oil prices could surge to $200 a barrel, Iran warns as war stretches on

Iran's military command said on Wednesday the world should be prepared for oil to hit US$200 a barrel, as three more ships came under attack in the blockaded Gulf.

Iran’s military command said on Wednesday the world should be prepared for oil to hit US$200 a barrel, as three more ships came under attack in the blockaded Gulf.

Iran fired at Israel and targets across the Middle East on Wednesday, demonstrating it can still fight back and disrupt energy supplies despite what the Pentagon has described as the most intense U.S.-Israeli strikes yet.

Oil prices that shot up earlier this week have eased and stock markets have rebounded, with investors betting for now that U.S. President Donald Trump will find a quick way to end the war he began alongside Israel nearly two weeks ago.

But so far there has been no let-up on the ground, or any sign that ships can safely sail through the Strait of Hormuz, where a fifth of the world’s oil has been blockaded behind a narrow channel along the Iranian coast in the worst disruption to energy supplies since the oil shocks of the 1970s.

“Get ready for oil to be $200 a barrel, because the oil price depends on regional security which you have destabilized,” Ebrahim Zolfaqari, spokesperson for Iran’s military command, said in comments addressed to the United States.

After offices of a bank in Tehran were hit overnight, Zolfaqari also said Iran would respond with attacks on banks that do business with the United States or Israel. People across the Middle East should stay 1,000 meters from banks, he added.

A senior Israeli official told Reuters Israeli leaders now privately accepted that Iran’s ruling system could survive the war. Two other Israeli officials said there was no sign Washington was close to ending the campaign.

In the latest public display of defiance, huge crowds of Iranians took to the streets on Wednesday for funerals for top commanders killed in airstrikes. They carried caskets and brandished flags and portraits of slain Supreme Leader Ayatollah Ali Khamenei and his son and successor, Mojtaba.