TEHRAN – Israel and Iran exchanged more missile fire yesterday as concerns that the United States might escalate the Middle East conflict by launching ground raids against the Islamic Republic’s Gulf islands sent oil prices soaring. 

Iran also launched new strikes on a water desalination plant in Kuwait, after its own electrical facilities came under attack at the weekend, cutting power to parts of Tehran. Saudi Arabia said it had intercepted five ballistic missiles. 

The war has wreaked havoc on the global economy, with fuel shortages across much of Asia, stock markets in turmoil, and oil prices soaring, the main US benchmark rising past US$100 a barrel and UK-traded Brent up sharply to near US$117. 

With economies already reeling from recent energy price rises, and US President Donald Trump openly mulling a military operation to seize Iran’s main export terminal, market experts warned that any US ground operation or wider Iranian retaliation could send oil prices to historic highs. 

“If the US were to launch a ground invasion of Iran, possibly taking the Kharg Island, or if Tehran were to intensify retaliatory strikes on energy infrastructure or fully close the Strait, projections of US$200 bbl oil will not be an otherworldly supposition anymore,” analyst Tamas Varga of PVM Energy said. 

Oil has never cost more than US$150 a barrel, last hitting a record high during the July 2008 commodity boom, but the global benchmark Brent crude has risen by nearly 60% since the start of the war, and the US standard WTI by more than half. 

In an interview with the Financial Times, Trump said he wants to “take the oil in Iran” and could seize the export hub of Kharg Island, comparing this to his raid on Venezuela, where the US plans to control the oil industry following the capture of leader Nicolas Maduro in January. 

But the US leader nevertheless expressed confidence that there would soon be a negotiated end to the conflict, as Pakistan hosted regional foreign ministers for talks on the crisis. 

As Israel pressed its offensive against Iran-backed Hezbollah in south Lebanon, hitting an army checkpoint and killing at least one Lebanese soldier, an official told AFP, Indonesia yesterday confirmed one of its peacekeepers was killed after the UN force said a projectile hit one of its positions. 

Separately, the Israeli military said a soldier was killed on Sunday in combat in southern Lebanon, bringing to six the number of troops killed since fighting with Hezbollah began this month. 

–Nampa/AFP