Trump, Iran threaten power, energy targets as war escalates

TEL AVIV/JERUSALEM/WASHINGTON – US President Donald Trump and Iran threatened to escalate their war, targeting energy and fuel facilities in the Gulf, which could again roil global energy and financial markets and deepen a regional crisis.

Mr Trump on March 21 threatened to “obliterate” Iran’s power plants if Tehran does not fully reopen the strait within 48 hours, a dramatic escalation that came barely a day after he talked about “winding down” the war, now in its fourth week.

“If Iran doesn’t FULLY OPEN, WITHOUT THREAT, the Strait of Hormuz, within 48 HOURS from this exact point in time, the United States of America will hit and obliterate their various POWER PLANTS, STARTING WITH THE BIGGEST ONE FIRST!” Mr Trump posted on social media.

Iran warned on March 22 it would target US infrastructure, including energy facilities in the Gulf, if Mr Trump carried out his threat, which he made as US Marines and heavy landing craft continue to head to the region.

More than 2,000 people have been killed during the war the US and Israel launched on Feb 28, which has upended markets, spiked fuel costs, fuelled global inflation fears and convulsed the postwar Western alliance.

The threat of Iranian attacks has kept most ships from getting through the strait, a narrow waterway that serves as the conduit for around a fifth of global oil and liquefied natural gas supplies. Its near-closure sent European gas prices surging as much as 35 per cent last week.

Iran’s Khatam al-Anbiya military command headquarters said on March 22 that if the US attacks Iran’s fuel and energy infrastructure, then Iran would target all US energy, information technology and desalination infrastructure in the region.

IG market analyst Tony Sycamore said: “President Trump’s threat has now placed a 48-hour ticking time bomb of elevated uncertainty over markets. If the ultimatum is not walked back, we will likely see a Black Monday reopening of global equity markets in free fall and oil prices spiking significantly higher.”

Tehran would likely target Gulf energy facilities in Saudi Arabia, the United Arab Emirates and Qatar, which “would deepen and prolong the pain of higher energy prices and drag the conflict into a broader regional crisis”, Mr Sycamore said.

Oil prices jumped on March 20 and settled at their highest in nearly four years, after Iraq declared force majeure on all oilfields developed by foreign firms, Israel attacked a major gas field in Iran and Tehran responded with strikes on neighbours, Saudi Arabia, Qatar and Kuwait.

Iranian attacks have effectively closed the Strait of Hormuz, a narrow choke point that carries around a fifth of global oil and liquefied natural gas supplies, causing the worst oil crisis since the 1970s. Its near-closure sent European gas prices surging as much as 35 per cent last week.

The Strait of Hormuz remains open to all shipping, except vessels linked to “Iran’s enemies”, Iran’s representative to the UN maritime agency was quoted as saying in Iranian media reports published on March 22.

Mr Ali Mousavi’s comments came from an interview published on March 20 by Chinese news agency Xinhua, before Mr Trump’s threat to target Iranian power plants if the strait was not “fully open” within 48 hours.

He said passage through the narrow waterway was possible by coordinating security and safety arrangements with Tehran.

Ship-tracking data has shown some vessels, such as Indian-flagged ships and a Pakistani oil tanker, have managed to negotiate safe passage through the strait. Pakistan has good ties with Iran while maintaining close relations with the US and Saudi Arabia.

Mr Trump’s idea in targeting Iranian infrastructure is to make the Hormuz blockade “economically and politically unbearable for Tehran, without destroying Iranian oil fields that would cause long-term global supply damage,” IG’s Mr Sycamore said.

The Islamic republic’s power grid is deeply intertwined with its energy sector. Striking major plants could trigger blackouts, crippling everything from pumps and refineries to export terminals and military command centres.

Iran’s largest power plants include the Damavand facility near Tehran, the Kerman plant in the southeast and Ramin in Khuzestan province, all of which have much greater generation capacity than Iran’s sole nuclear plant at Bushehr on the southern coast.

Iran expands firing range

Iranian forces for the first time fired long-range missiles on March 21, expanding the risk of attacks beyond the Middle East, even as an Iranian strike injured dozens of people not far from Israel’s nuclear site.

Iran launched two 4,000km-range ballistic missiles at US-British military base Diego Garcia in the Indian Ocean, Israeli military chief Eyal Zamir said.

“These missiles are not intended to strike Israel. Their range reaches European capitals – Berlin, Paris and Rome are all within direct threat range,” Mr Zamir said.

The Israeli military said on March 22 it was striking Tehran just hours after Iran’s attacks on southern Israel.

Mixed signals

Mr Trump and his administration have sent mixed messages about US goals throughout the war, now in its fourth week, leaving US allies struggling to respond.

His ultimatum on March 21 was the most abrupt shift yet. Mr Trump’s rhetoric pivoted from a drawdown to an explicit 48-hour countdown to strike Iran’s power infrastructure, even as US Marines and heavy landing craft continue heading to the region.

He had also accused NATO allies of cowardice over their reluctance to help open the strait. Some allies have said they will consider it, but most said they are reluctant to join a war that he started without consulting them.

Japan could consider deploying its military for minesweeping in the strait, if a ceasefire is reached, Foreign Minister Toshimitsu Motegi said on March 22.

A new Reuters/Ipsos poll, conducted last week, finds that 59 per cent of Americans disapprove of US military strikes against Iran, with 37 per cent approving.

The war has become a major political liability for Mr Trump ahead of November mid-term elections for the Congress, with energy price shocks fuelling US inflation and hitting consumers and businesses hard. REUTERS