Oil markets were priced for pain on Saturday but bracing for something worse. With crude at around $120 per barrel, already elevated by weeks of conflict, energy traders and analysts were modelling scenarios in which prices surged to $150 — or higher — if the US-Iran war continued to damage Gulf energy infrastructure. The Strait of Hormuz remained closed, Kharg Island was being bombed, and Fujairah had just been struck by Iranian missiles. Every scenario that energy economists feared was playing out simultaneously.
The key variable, analysts said, was Kharg Island. Iran’s primary crude export terminal handles the vast majority of the country’s oil exports, and its full destruction would remove a significant volume of supply from global markets at a time when the Hormuz closure had already curtailed flows dramatically. President Trump said in public remarks the island had been effectively demolished, and he left open the possibility of further strikes. He simultaneously threatened to destroy Iran’s remaining oil infrastructure if Tehran continued blocking the strait.
Trump also called on allied nations to send warships to the Strait of Hormuz, naming China, France, Japan, South Korea, and the UK. Energy analysts noted that even if a naval coalition succeeded in reopening the strait, the damage to Kharg Island and other Gulf infrastructure would take time to repair. The economic cost of weeks of closure was already being felt across global supply chains. Sustained disruption could trigger recession in vulnerable economies dependent on imported energy.
Iran struck Fujairah in the UAE on Saturday, forcing a suspension of oil-loading operations. Iranian commanders threatened further strikes on Gulf energy facilities with American ties. Israel conducted dozens of raids inside Iran, killing at least 15 people in Isfahan. Iran fired rockets at Israel in return. US Defence Secretary Pete Hegseth claimed Iran’s leadership was hiding underground and wounded. Iranian officials confirmed Khamenei’s injury but called it minor. The International Crisis Group said the regime was intact and pursuing a long-term strategy.
The human cost added urgency to the economic analysis. More than 1,400 Iranians had been killed in sustained bombing. Thirteen Israelis and roughly 20 Gulf residents had died. Lebanon’s crisis continued, with 800 killed and 850,000 displaced from Israeli strikes on Hezbollah. Six US troops died in an aircraft crash in Iraq. The US embassy in Baghdad was struck, and Americans in Iraq were ordered to leave. For the global economy, the question was no longer whether a significant shock had occurred but how much worse it was going to get.