An oil tanker burns after being hit by an Iranian strike in the ship-to-ship transfer zone at Khor al-Zubair port near Basra, Iraq, late on March 11. (AP)
March 12, 2026 8:47 AM, EDT
| Updated: March 12, 2026 12:44 PM, EDT
Iran launched a fresh wave of attacks on shipping in the Persian Gulf, briefly pushing crude back above $100 a barrel and intensifying what the world’s energy watchdog called the biggest oil market disruption in history.
Strikes on two vessels off the coast of Iraq prompted the nation’s oil terminals to suspend operations, in an escalation that’s likely to leave global shipowners even less willing to consider crossing the vital Strait of Hormuz. A containership was also hit near the United Arab Emirates.
The longer the conflict drags on, the bigger the impact on energy markets that have already seen fuel prices soar, with some parts of the world experiencing shortages. Iran’s new supreme leader and President Donald Trump showed no signs of backing down.
Ayatollah Mojtaba Khamenei said in his first public comments since succeeding his father that Hormuz should remain closed, while Trump said stopping Iran from having nuclear weapons was more important than oil prices. Energy Secretary Chris Wright, meanwhile, said military escorts were unlikely to start until the end of the month.
Saudi Arabia and other Middle Eastern producers have been forced to slash oil output in recent days, and are racing to implement workarounds to export barrels outside of Hormuz. The strait — which handles about of a fifth of the world’s oil flows — has been effectively closed since the war broke out, choking off commodity supplies to the rest of the world.
UKMTO WARNING 022-26
Click here to view the full Warning⤵️ https://t.co/ckodDQ1ABQ#MaritimeSecurity #MarSec pic.twitter.com/9msiZhnJra
— UKMTO Operations Centre (@UK_MTO) March 12, 2026
Prices of fuels like diesel and jet fuel are surging as refineries in the region reduce production or shut completely, while fuel makers elsewhere balk at high crude prices. The International Energy Agency warned on March 12 that the conflict will slash global oil supply by 8 million barrels a day this month — the largest-ever disruption to output.
Only one bulk carrier was seen transiting out of the Persian Gulf on March 12, broadcasting a ‘China Owner/Crew’ status via AIS signal, according to vessel-tracking data compiled by Bloomberg.
Global benchmark Brent crude surged as much as 10% on March 12 as the crisis deepened, with even news of a historic 400-million-barrel release of reserves coordinated by the International Energy Agency unable to cool the rally. Traders were still awaiting details of exactly how quickly those barrels can be released.
READ MORE: US to Waive Jones Act in Bid to Tame Spiraling Fuel Prices
“The real issue is not the headline volume of reserves, it is whether physical flows through Hormuz can resume in a credible and sustained way,” said Ole Hvalbye, a commodities analyst at SEB AB.
Iraq’s State Organization for Marketing of Oil, or SOMO, said the tankers hit in its territorial waters were the Marshall Islands-flagged Safesea Vishnu and the Malta-flagged Zefyros. The country stopped operations at its oil terminals.
Safesea Group, which manages the Safesea Vishnu, said its vessel was struck by an unmanned craft while conducting a ship-to-ship transfer of naphtha, a fuel used in petrochemical and gasoline production. The crew jumped into the water, and were rescued, but one was later declared dead.
Ships were also ordered to leave the Mina Al Fahal oil terminal in Oman as a precautionary measure. The port was reopened after several hours, with operations and loadings now continuing as usual.
The Middle East war is creating the largest supply disruption in the history of oil markets
As a result, IEA Members have agreed to release 400 million barrels of emergency oil stocks to support market stability
More in our latest Oil Market Report ➡️ https://t.co/McMLAo4Ovn pic.twitter.com/FKwGwCd6G3
— International Energy Agency (@IEA) March 12, 2026
Still, the evacuation at Mina Al Fahal, which sits outside of the Strait of Hormuz, shows how the conflict is expanding to threaten the few ports from which Middle Eastern oil can still be shipped.
Disruptions in Oman raise “fears over broader regional supply,” said Warren Patterson, head of commodities strategy at ING Groep NV. “The market will have to start worrying about more than just Strait of Hormuz oil flows.”
The evacuation order for Mina Al Fahal came after drone attacks at other ports in the country on March 11 that impacted fuel tanks. The Salalah port suspended operations at its container and general cargo terminals, according to a report from Inchcape Shipping Services.
Disruptions at Oman’s terminals are also significant because the crude grade they export is one of two that can still go into setting the Middle East’s Dubai price benchmark, after others were excluded last week when Hormuz was effectively closed. S&P Global, which publishes the benchmark, said it was monitoring the situation.
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Around 1 million barrels a day of Omani oil are exported from Mina Al Fahal, according to Kpler. The grade was priced at around $135 a barrel on March 12, well above global benchmark Brent, which is currently near $100 a barrel.
The effective closure of Hormuz has led Iraq, Kuwait and Saudi Arabia to cut output. Loadings are continuing from Fujairah, the main export terminal for the UAE that sits outside the strait, but some shipowners are avoiding the port due to the risk of attacks. Saudi Arabia, meanwhile, is sending oil via a pipeline to Yanbu on its Red Sea coast.
But those workarounds don’t have the capacity to reach anywhere near the roughly 20 million barrels a day that typically flowed through the strait. The impact of the IEA’s emergency release will also be limited.
“While we are set to see a record coordinated release of emergency stockpiles, the pace that these supplies will hit the market only covers a fraction of the supply losses we are seeing,” ING’s Patterson said.
Written by Yongchang Chin, Salma El Wardany, Alfred Cang and Alex Longley
