World

THE US struck military sites on Kharg Island, from which Iran exports almost all its oil, for the first time overnight, upping the ante in a Middle East war that’s raged for more than two weeks and shows little sign of easing.

US President Donald Trump (picture) said military facilities on the Persian Gulf island had been “obliterated”, adding that he chose not to hit oil infrastructure “for reasons of decency”. He threatened to do just that should Iran “do anything to interfere with the free and safe passage of ships through the Strait of Hormuz”.

Iran reacted on Saturday morning by warning it will target American-linked oil and energy facilities in the Middle East if its own petroleum infrastructure is attacked. Iranian media said all oil-industry workers on the island, which sits about 25km off the mainland, are safe and unharmed.

The strike is likely to raise fears of more oil and natural gas supply disruptions in the region. Brent crude closed above US$100 (RM393.85) a barrel on Friday and was at its highest level in almost four years.

All oil, economic, and energy facilities belonging to oil companies in the region that are partly owned by the US or that cooperate with the US will be immediately destroyed and reduced to ashes” if Iran’s energy and economic assets are hit, the country’s Fars News Agency reported, citing the central military command.

The outlet said more than 15 explosions shook Kharg Island, with the targets including air-defence systems, a naval base, an airport control tower and a helicopter hangar. It didn’t specify the scale of the damage.

In the United Arab Emirates, some oil operations at Fujairah on the Gulf of Oman were suspended after a drone attack and fire on Saturday morning, people familiar with the matter said. Dubai authorities said debris from an interception hit the facade of a building in a central part of the city. “No fire occurred and no injuries were reported,” the Dubai Media Office said.

Iranian media reported more attacks on Tehran early on Saturday, while the Islamic Republic’s military said it again targeted Israel overnight and a base near Abu Dhabi that hosts US troops. The Associated Press, citing Iraqi security officials, reported that a missile hit a helipad within the compound of the US Embassy in Baghdad.

Energy escalation

Threats by the warring sides to further hit energy hubs mark a new escalation in a conflict that erupted with US and Israeli attacks on Iran on Feb 28. Tehran has retaliated by firing drones and missiles at Israel and at Arab states including Saudi Arabia, the United Arab Emirates, Qatar and Kuwait. It has also struck at Türkiye.

Iran, easily outpowered militarily by the US and Israel, is targeting neighbouring states in a bid to cause chaos in the region and energy markets, hoping it puts pressure on Trump to end the fighting. The US leader is facing criticism at home as gasoline pump prices soar and with many political opponents saying he underestimated Iran’s response and resilience.

Iran has attacked several ships in the vicinity of Hormuz, which has effectively shut the vital waterway. Normally, a fifth of the world’s oil supply flows through it, as well as plenty of container ships. Saudi Arabia, Iraq, the United Arab Emirates and Kuwait have all had to curb crude production, while Qatar has halted operations for liquefied natural gas. It is one of the world’s top three suppliers of the fuel.

The conflict has rattled global debt and equity markets too, with bonds falling as traders predict inflationary pressures and that central bankers will have to pause or even reverse interest rate cuts.

Uncertainty over the length of the war is mounting amid Trump’s mixed signals and Iran’s continued defiance. On Friday, the president said the US would continue its campaign for “as long as necessary” and suggested the American navy would soon begin escorting ships through the Strait of Hormuz. That was a shift from earlier remarks that US military objectives were “pretty well complete”. — BLOOMBERG

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ANKARA/ISTANBUL — At least 12 people were killed in separate US-Israeli strikes targeting residential areas in central and western Iran on Saturday, Anadolu Ajansi reported.

Iran’s state television reported that a US-Israeli strike targeted the village of Hizab in Markazi province in central Iran, hitting a residential house and killing six civilians while injuring seven others.

In a separate incident, the Ilam governorate said a strike targeted a residential house in the city of Eyvan in western Iran, causing a powerful explosion that destroyed the building.

It said six members of one family were killed in the attack, including a six-month-old infant.

Rescue teams were continuing debris-removal operations at the site in Eyvan, the governorate added.

⁠Since Israel and the US launched joint attacks on Iran on Feb 28, killing some 1,200 people, including then-Supreme Leader Ayatollah Ali Khamenei, hostilities have escalated.

Iran has retaliated with drone and missile strikes targeting Israel, Jordan, Iraq, and Gulf countries hosting US military assets. — BERNAMA-ANADOLU

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ISTANBUL — Iran is considering allowing a limited number of oil tankers to pass through the Strait of Hormuz on the condition that the cargo is traded in Chinese yuan, Anadolu Ajansi reported, citing a media report.

A senior Iranian official told CNN on Friday that the potential move is part of Tehran’s plan to manage the flow of oil tankers through the strategic waterway.

Global oil is predominantly traded in US dollars, except for sanctioned Russian oil, which is priced in roubles or yuan, CNN said, adding that China has sought for years to expand the use of yuan in oil transactions, but the dollar remains the world’s primary reserve currency.

Concerns about disruptions in the strait, a critical route for the world’s energy supply, have pushed oil prices to their highest level since July 2022, following the start of the Russian-Ukrainian conflict that began earlier that year, it said.

The Strait of Hormuz carries about 20 million barrels of oil a day and roughly 20 per cent of global liquefied natural gas trade.

The UN warned on Friday that restrictions on shipping through the strait could have a “massive impact” on humanitarian operations in the region.

Tehran has effectively closed the Strait of Hormuz since March 1, following Israel and the US launching joint attacks against Iran on Feb 28, which have so far killed around 1,300 people, including then Supreme Leader Ayatollah Ali Khamenei. Hostilities have since escalated. — BERNAMA-ANADOLU

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THE Trump administration approved BP plc’s plan to pump billions of dollars worth of crude from what will be the company’s first virgin field development in the Gulf of Mexico since the deadly 2010 Deepwater Horizon disaster that triggered the worst oil spill in US history.

BP’s deepwater Kaskida project is scheduled to start crude production in 2029. In its initial phase, the development is expected to produce the equivalent of about 275 million barrels from a section of the seafloor estimated to hold as much as 10 billion barrels.

The Department of Interior’s approval of Kaskida comes despite objections from environmental groups and Democratic lawmakers, who warn another Deepwater Horizon-like catastrophe could threaten Gulf Coast communities and ecosystems while encouraging more ultra-deep water drilling.

BP has said “the safety of our people and the environment will remain our highest priority”. 

BP’s return to large-scale Gulf of Mexico development has been gradual since the April 2010 eruption of the Macondo well that killed 11 workers and destroyed Transocean Ltd’s Deepwater Horizon floating rig.

Although the British oil major was cleared to resume bidding on federal offshore drilling leases in early 2014, Kaskida represents BP’s first full-blown new project development in the region in almost 16 years. 

“Kaskida is a world-class project that reflects decades of technological innovation by BP and the offshore oil and gas industry,” a company spokesperson wrote in an email. 

“This US$5 billion (RM19.69 billion) investment will safely bring online more American energy by helping to unlock 10 billion barrels of discovered BP resources in the Gulf of America’s Paleogene fields.”

The Kaskida find has remained largely undeveloped since its discovery almost 20 years ago because the oil industry lacked technology capable of managing the field’s high pressure and forbidding geology.

The Deepwater Horizon, which still rests at the bottom of the Gulf, was under lease by BP at the time of the Macondo disaster. — BLOOMBERG

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THE US is slated to receive around US$10 billion (RM39.38 billion) as a fee from investors as part of the recently completed deal for China’s ByteDance Ltd to sell the American operations of the social video app TikTok to a consortium of US investors, The Wall Street Journal (WSJ) reported on Friday.

A federal law required TikTok to either be shut down in the US or sold to domestic owners at the beginning of US President Donald Trump’s second term. But the president used a series of executive actions to extend that deadline and the White House helped broker the sale to a group led by Oracle Corp and Silver Lake Management LLC.

The White House did not immediately respond to a request for comments, but Trump had previously alluded to such a fee.

“The US is getting a tremendous fee-plus — I call it a fee-plus — just for making the deal and I don’t want to throw that out the window,” Trump said in September.

The new entity — known as TikTok USDS Joint Venture LLC — will be responsible for moderating content on TikTok and protecting the data of US users. 

It will be governed by a new, seven-member, majority-American board. TikTok chief executive officer Shou Chew — who will continue running ByteDance’s most valuable asset globally — will have a seat on the board. Adam Presser, who was TikTok’s head of operations, trust and safety, will helm the US venture as its CEO. — BLOOMBERG

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THE worst supply disruption in the history of the oil market is showing no signs of abating anytime soon, offering the global economy little respite from crude prices that have surged 40% since the Iran war began.

In the first few days after the US and Israel bombed Iran, some traders said they thought the closure of Strait of Hormuz, for years the oil market’s worst-case scenario, could be brief. Now, fully two weeks in, they are bracing for longer disruption and one that with every passing day is reducing supply.

Mojtaba Khamenei used his first comments as Iran’s new leader this week to say his country should keep the waterway closed. At the same time, US President Donald Trump posted on social media that stopping Iran from having nuclear weapons was more important to him than high oil prices – even as his country led a record global release of emergency stockpiles.

For shipowners, who are almost all avoiding Hormuz, their comments will reinforce wariness about transits after a week that included multiple attacks on commercial vessels, one of which left three crew members unaccounted for. There have also been reports — contested by the US — that Iran is starting to lay mines in the maritime chokepoint. Norway, among the world’s top maritime nations, has told its fleet to stay away.

“We understand that the situation has deteriorated further, and that we are now experiencing a greater degree of insecurity,” Alf Tore Sorheim, the country’s director of maritime affairs, said. “Conditions remain very dangerous for commercial shipping.” 

For Trump, allowing Hormuz to stay shut is a high-stakes decision that’s already driven up gasoline prices at the pump to the highest of any point in his presidency — with midterm elections taking place later this year. 

If hostilities did stop, and Iran assured ships of safe passage, then millions of barrels would flood back into global markets, and help to bring oil and fuel prices crashing back down.

Instead, traders have been grappling with giddying volatility.

In just two days this week, prices soared up to US$120 a barrel before crashing back down to just above US$80 — a bigger swing in 48 hours than the entire trading ranges of the prior three years. Brent futures are now near US$100 (RM393.85).

Supply impact

And the market impact is growing by the day. Middle Eastern producers have already shut in more than six million barrels a day of oil production. 

The International Energy Agency (IEA), the world’s main energy adviser, says the Hormuz blockage is causing the biggest supply disruption on record, and fuelmakers are curbing output, reductions that can take weeks to reverse.

Consuming nations — led by the US — embarked on an effort to tame prices this week, starting with plans to release 400 million barrels of oil from storage across the globe. 

Some are adopting protectionist measures to keep fuel supplies at home, including levies and export restrictions. US officials have also publicly considered intervening directly in futures markets, though some downplayed the prospect of such a move.

All of those measures are sticking plasters compared to the full closure of Hormuz, and the toolkit for taming oil prices is emptying fast. 

The IEA estimated on Thursday that more than 600 million barrels of oil and fuel flows via Hormuz will be disrupted this month, and almost 250 million barrels of Middle East oil production.

“Every day the strait remains shut, we are closing now more and more upstream production,” Amrita Sen, co-founder of consultant Energy Aspects, said in a Bloomberg TV interview. “We should be a lot higher. There is fear about US policy intervention, but the US is also running out of options.”

Saudi Arabia, the largest producer in the region, is now pulling every lever it can to keep supplying barrels to refineries around the world.

The boss of Saudi Aramco said this week that he expects a pipeline across the country to its Red Sea coast to soon be up to its full capacity, which will allow about 5 million barrels a day of exports.

A flotilla of supertankers that stretches from the Red Sea to Singapore is on its way to haul those barrels. 

It’s a logistics feat that has never been tested to this extent before, and traders are watching closely to see how quickly Saudi Arabia gets those flows fully up and running. Exports are now up to about 2.9 million barrels day.

The bypass might be needed for a while.

Seven ships were hit this week in the Persian Gulf and surrounding area. One vessel was struck in the middle of Hormuz while attempting to escape.

The UK said on Thursday that reports Iran was mining the waterway “have become clearer and clearer,” though US Secretary of War Pete Hegseth insisted a day later that there was “no clear evidence” that Tehran had done so. 

Emergency stocks

One of the brakes on prices will be the pace at which countries release oil from their emergency reserves. 

In 2022, when an equivalent programme was launched, the US managed to release at a rate of about 900,000 barrels a day for a three-month period — a pace that Energy Secretary Chris Weight subsequently said caused damage. 

But it’s unclear how fast Asian nations like Japan will be able to get their reserves to market. Buyers there are currently more in need than the rest of the world. 

Regardless, none of it can replace Hormuz if it stays closed for a prolonged period. 

“With the release of strategic oil stocks, this is essentially symptom treatment,” said Arne Lohmann Rasmussen, the chief analyst of A/S Global Risk Management. “It does not solve the underlying problem that the Strait of Hormuz remains closed. And there is currently no sign of it reopening anytime soon.” — BLOOMBERG

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HANOI — Despite the war in West Asia that has spiked oil prices, the people of Vietnam seem oblivious to the consequent inflationary pressures, especially for a nation that depends significantly on imported crude oil.

A casual observation by this reporter on assignment in Hanoi seems to indicate that the people are not aware of the fallout of the global crisis happening some 6,000 kilometres away, with the roar from the large number of motorcycles, lorries, and cars on the streets here, as motorists race to get to their destinations.

Businesses continued to be brisk with markets and roadside stalls a hive of lively activity as residents went about their usual routine of buying groceries and daily necessities. Young people gathered along streets and cafés, enjoying themselves as the war raged in West Asia.

But the reality is that fuel disruptions far away from here, especially through the critical Strait of Hormuz, where oil tankers, including those bound for Asia, are being attacked, can affect ordinary Vietnamese. Higher prices of oil imports will have a telling effect on the prices of goods and services.  This can hit the daily lives of the 100 million or so people of Vietnam really hard, eventually, if the war is protracted.

What is baffling is that the government’s call for people to work from home (WFH) to save on fuel costs, as the war in West Asia disrupts oil supplies, seems to have fallen on deaf ears. This was evident by the constant honking of vehicles and the traffic congestion and gridlock, with the hustle and bustle, which is part of everyday life in Hanoi, continuing unabated.

Vietnam’s Ministry of Industry and Trade has encouraged its citizens to work remotely amid escalating tensions in West Asia.

According to news reports, prices for gasoline in Vietnam had risen by 32 per cent, diesel by 56 per cent, and kerosene by 80 per cent by the end of February.

This writer believes that the Vietnamese are not so inclined to WFH because the services and manufacturing sectors are key pillars of the country’s economy. These sectors require many tasks and responsibilities to be carried out in person, and for manufacturing and services activities to continue as usual.

This is more so as the government’s call for people to WFH was merely an encouragement rather than a compulsory directive.

As the writer noticed, the day was no different from any other day since arriving in the country a few days ago.

Perhaps the time will come when ordinary folks will tighten their belts once higher prices hit their pockets and diminish their purchasing power. Then, they might be forced to WFH.

Tourism is an important revenue earner for Vietnam. When visiting several locations, the writer noticed tourists from many countries, including Japan, South Korea, the Philippines, China, and several European countries.

A Malaysian passenger on the flight to Hanoi said the purpose of his trip was for work, adding that he and his team regularly travel to Vietnam for business purposes. He told me that the airfare for this trip was higher compared with the same period last year and said this was partly due to the conflict in West Asia, which has raised fuel surcharges and airfares.

It was surprising that two Vietnamese participants at a programme organised by a renowned international courier company, as well as a Hong Kong national working in Vietnam, were unaware of the government’s announcement of the WFH initiative.

One of the participants, Nhu Phan, 31, told Bernama she was aware of the global increase in fuel prices, including in Vietnam, and the tensions in West Asia, but not the government’s WFH announcement. When asked whether she would prefer working from home or from the office if given a choice, Phan, who works as an account manager at a private company, said she would prefer a hybrid arrangement.

“Because for me, I need to manage the team. So, I cannot manage the team remotely. It is not efficient,” she said.

Asked about her concerns over potential fuel supply shortages and rising fuel prices in the country, she said that while she had noticed the recent price increase within just a week, she was more concerned about inflation. “The hike in fuel prices will affect all costs, such as food and lifestyle. So, we are not worried about the fuel itself. We are more worried about inflation,” she added.

Since the government’s suggestion for people to work remotely remained an optional measure rather than mandatory, many have chosen to ignore it as of now.

As such, daily activities, businesses, and services, including those in the tourism sector, continue to thrive as normal in the country. But these are early days yet for Vietnam, and things might change later, especially so for a country that imports significant amounts of crude oil and petroleum products. — BERNAMA

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TEHRAN — President Donald Trump said Friday that the United States had heavily bombed military targets on Iran’s oil hub Kharg Island and the US Navy would soon begin escorting tankers through the Strait of Hormuz.

Several top Iranian officials joined a defiant pro-government rally in Tehran, meanwhile, marching alongside demonstrators waving banners reading “Death to America” and “Death to Israel.”

As the United States intensified its bombing of Iran, Tehran launched a new wave of drone and missile attacks on Israel and its Gulf neighbours.

The war between Israel and Hezbollah in Lebanon continued to rage and the Lebanese health ministry said an Israeli strike on a primary healthcare center in southern Lebanon had killed at least 12 medical personnel on Friday.

According to the Lebanese authorities, at least 773 people have been killed by Israeli attacks in Lebanon aimed at wiping out Iranian ally Hezbollah.

In a post on Truth Social, Trump said military targets on Kharg Island, which handles almost all of Iran’s crude exports, had been “totally obliterated” in “one of the most powerful bombing raids in the History of the Middle East.”

He said he had chosen not to target oil infrastructure on the island for now.

“However, should Iran, or anyone else, do anything to interfere with the Free and Safe Passage of Ships through the Strait of Hormuz, I will immediately reconsider this decision,” the US president said.

With oil prices spiking, Trump was asked when the US Navy would begin escorting tankers through the Gulf’s critical Strait of Hormuz. “It’ll happen soon, very soon,” he said.

Iranian strikes have all but halted maritime traffic in the Strait of Hormuz, through which a fifth of global crude oil and liquefied natural gas normally pass.

US Marines dispatched

The United States and Israel have treaded carefully around Kharg Island until now, but US officials have been reported as saying that capturing the island was potentially on the table.

The Wall Street Journal and New York Times reported on Friday that the Pentagon had dispatched the Japan-based amphibious assault ship USS Tripoli to the region along with its complement of some 2,500 Marines.

Heavy blasts shook Tehran late Friday after the United States vowed to step up air strikes and Iranian state media said a fresh round of missiles had been launched towards Israel. Israeli rescue workers said no casualties were reported.

Blasts were heard in Doha early Saturday and Qatar’s defense ministry said its military had intercepted missiles targeting the Gulf state.

Saudi Arabia’s defense ministry said its forces had intercepted dozens of drones on Friday and Turkey said NATO forces shot down a ballistic missile launched from Iran — the third such interception in the war.

The Islamic republic is intent on showing it will come through the war intact and in control, despite its supreme leader Ali Khamenei being killed at the start of the US-Israeli campaign on February 28.

Khamenei’s son Mojtaba Khamenei was named the new supreme leader, but has been absent from public view and said to be wounded.

The US government unveiled a $10-million reward for information about Mojtaba Khamenei’s whereabouts.

$100 a barrel

US Defense Secretary Pete Hegseth told a news conference the US military would bombard Iran more heavily on Friday than any other day so far in the war.

According to the Pentagon, the US and Israel have struck more than 15,000 targets in Iran over the past two weeks. Israel’s military said it conducted 7,600 strikes on the country, most of them against its missile program.

The conflict has sparked chaos in global markets and sent oil prices soaring.

Brent contracts for a barrel of crude have soared more than 42 percent, leaving markets and governments everywhere skittish about energy supply and higher inflation. On Friday, oil stayed above $100 a barrel.

Within Iran, the Revolutionary Guards have warned of an even stronger response to any anti-government protests, after ones in January in which several thousand people were killed.

Iranian authorities have maintained an internet blackout since the war started.

Iranians speaking to AFP under cover of anonymity have described a grim picture of cities in ruins and cash running short.

A woman in Kermanshah, western Iran, told AFP that “countless” people from Tehran had come to seek refuge from the air strikes, adding to demand for food and scarce medicine, with prices “nearly doubling.”

The UN refugee agency has estimated that up to 3.2 million people have been displaced inside Iran since the war started.

Iran’s health ministry said on March 8 that more than 1,200 people have been killed, a figure AFP has not been able to verify independently.

The US military has lost 13 personnel since the war started — including six members of a refuelling aircraft that crashed in Iraq after an incident officials said was not caused by hostile fire. — AFP

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WASHINGTON — The US State Department on Friday announced a reward of up to US$10 million for information leading to the identification or location of Iran’s key leaders, including Iran’s new Supreme Leader Mojtaba Khamenei, Anadolu Ajansi reported.

The announcement, released by the department’s Rewards for Justice programme, said the targeted individuals “command and direct various elements” of the IRGC, which Washington accuses of planning and carrying out attacks around the world.

Among those listed in the notice are Khamenei, Ali Asghar Hejazi, deputy chief of staff in the office of the supreme leader; and Yahya Rahim Safavi, a senior military adviser to the supreme leader.

Earlier in the day, US Defence Secretary Pete Hegseth said that Iran’s newly appointed supreme leader is “wounded” and “likely disfigured” as the US and Israel continue attacking the country.

Tensions across the Middle East have flared up since Israel and the US launched a joint attack on Iran on Feb 28, killing so far around 1,300 people, including the then Supreme Leader Ali Khamenei.

Tehran retaliated with drone and missile strikes targeting Israel, Jordan, Iraq, and Gulf countries that are home to US military assets, resulting in casualties and damage to civilian infrastructure and affecting global markets and aviation. — BERNAMA-ANADOLU

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WASHINGTON — The US Treasury Department eased some sanctions against Venezuela on Friday, making it easier for American businesses and farmers to buy Venezuelan oil and fertiliser as prices rise amid the war with Iran, Anadolu Ajansi reported.

The Treasury’s Office of Foreign Assets Control (OFAC) updated several Venezuela-related licences to expand permitted investment and activities in the energy sector.

A US Treasury Department official said the authorisations are intended to help revitalise Venezuela’s energy sector while supporting global commodity supplies.

“These authorisations expand permitted investment and activities in Venezuela’s energy industry and allow for the export of fertiliser directly to the US to support our great American farmers,” the official said in a statement.

The move comes as supply disruptions in the Strait of Hormuz amid the US-Israeli war with Iran have pushed up global oil and fertiliser prices. — BERNAMA-ANADOLU

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