Iran strikes oil infrastructure, causing crude prices to surge once more

As the Middle East conflict rages on, a fuel tanker was seen passing the Mobil fuel distribution centre in Melbourne's Yarraville suburb on March 12, 2026, amidst soaring petrol and diesel demands and prices. Global oil prices have surged dramatically since the war began, prompting warnings that high fuel prices could drive inflation above 5 per cent in Australia.

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Iran launched a fresh wave of attacks on Gulf energy targets on Thursday, just hours after two oil tankers were hit, sending crude prices soaring once again despite the release of record strategic crude reserves. The renewed attacks involved drones and missiles targeting Iran's Gulf neighbours and Israel, following a warning from Tehran that it could wage a prolonged war that would have devastating effects on the global economy.

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US President Donald Trump insisted that Iran was on the brink of defeat, although he cautioned that this did not necessarily mean the war would end immediately. The conflict, which was launched by the United States and Israel, has rapidly spread across the region, resulting in hundreds of deaths from Israeli strikes in Lebanon and sparking widespread global economic upheaval.

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On Thursday morning, Bahrain urged its residents to stay indoors and close their windows after an Iranian attack on fuel tanks, while Saudi Arabia reported intercepting drones headed towards the Shaybah oil field and the embassies district. Earlier, drones had struck fuel tanks at Oman's Salalah port, prompting the suspension of operations.

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Shipping in and around the critical Strait of Hormuz chokepoint also came under attack, with a container ship near the United Arab Emirates hit by an unknown projectile, according to a UK maritime agency alert on Thursday. The projectile caused a small fire onboard, but all crew members were reported safe.

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A separate incident involved an attack on two oil tankers near Iraq, which authorities said had killed at least one crew member, with 38 others rescued and a search for additional crew members ongoing. The Iraqi government's media cell stated that the two tankers were subject to sabotage, and the oil ministry expressed deep concern about incidents involving oil tankers in the Gulf.

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The Strait of Hormuz, through which a fifth of the world's oil passes, has effectively been closed by Iranian threats, with Iran vowing that not a single litre of oil will be exported from the Gulf while the US-Israeli attack continues. In the last day alone, at least four incidents involving vessels in the region have been reported.

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A Thai bulk carrier was hit by two projectiles on Wednesday, leaving three crew members missing and believed to be trapped in the engine room, according to transport company Precious Shipping. Suspected Iranian attacks were also reported elsewhere in the Gulf on Thursday, with Kuwait stating that two people were injured by a hostile drone that hit a residential building.

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The UAE also reported that its air defence was responding to a missile threat, as the renewed attacks came shortly after Trump stated that Iran was pretty much at the end of the line. Trump warned that Washington could strike infrastructure that would take a generation to rebuild, while indicating a preference for restraint.

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Earlier, Trump stated that the United States must finish the job in Iran, adding that US forces had struck 28 Iranian mine-laying vessels. Iran's Revolutionary Guards, meanwhile, warned that they would strike economic centres and banks linked to US and Israeli interests.

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Ali Fadavi, an adviser to the Guards' commander-in-chief, told state television that the United States and Israel must consider the possibility of a long-term war of attrition that would destroy the entire American economy and the world economy. The war's economic impacts have already been widely felt.

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On Thursday, oil prices soared past $100 a barrel, despite the International Energy Agency's decision to authorise a record release of strategic crude reserves, including 172 million barrels from the United States. The energy body's move was not enough to overcome fears of a prolonged conflict, with analysts suggesting that $90-100 a barrel could be the new normal for a while.

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The war's spread has hit Lebanon particularly hard, with Israel launching strikes and ground operations against Iran-backed Hezbollah, resulting in the deaths of over 630 people, according to Lebanese authorities. More than 800,000 people have registered as displaced, with around 126,000 of them staying in collective shelters.

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Many others have been forced to sleep in the open, including along the Beirut seafront, where an Israeli strike killed at least seven people on Thursday morning. The strike followed an earlier attack on a residential building in a central Beirut neighbourhood, which left destroyed walls on the building's seventh and eighth floors and damaged cars nearby.

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An AFP correspondent witnessed the destruction, and Fawzi Asmar, owner of a bakery on the same street, recalled that when the strike hit, I ran from room to room, pulled my wife and daughter out of the rooms and hid them behind a wall, then the second strike hit.

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The Israeli military stated that it had begun a wide-scale wave of strikes targeting terror infrastructure belonging to the Hezbollah terrorist organization across Lebanon. Israel's military also reported detecting a new launch of missiles directed at the state from Iran.

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Iran's health ministry reported on March 8 that more than 1,200 people have been killed in the war, although AFP is not able to access the sites of strikes or independently verify tolls in Iran. In Israel, authorities stated that 14 people have been killed, while attacks in the Gulf have killed 24 people, including 11 civilians and seven US military personnel.

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The war has cost the United States more than $11.3 billion, according to a Pentagon briefing cited by the New York Times, as lawmakers were informed of the escalating financial toll of the conflict.