The Islamic Revolutionary Guard Corps (IRGC) spokesman Sardar Nayini denied the claims of United States Energy Secretary Chris Wright that the US Navy successfully escorted an oil tanker through the Strait of Hormuz.
“None of the American ships will even dare to approach the Sea of Oman, the Persian Gulf, or the Strait of Hormuz during the war,” Nayini said, according to Iranian state news outlet Tasnim News.
The prices of oil nosedived on Tuesday as investors moved away from the commodity, reacting to ongoing developments in the Middle East. The International Energy Agency held an emergency meeting to discuss a possible release of stockpiles from its member states. Also, the finance and energy ministers from the Group of Seven (G7) are expected to discuss the same issue today. Additionally, comments from US President Donald Trump suggested the ongoing conflict in the region could be de-escalating sooner than expected.
United States Energy Secretary Chris Wright said on Tuesday that the US Navy successfully escorted an oil tanker through the Strait of Hormuz, following US President Donald Trump’s promise that Washington will offer “political risk insurance” to oil tankers passing through the critical waterway amid the ongoing conflict with Iran.
“We are having restrictions on the flow of energy through the Strait of Hormuz right now. We announced that we will step into the insurance market and ensure tankers to go through. A large oil tanker went through about 36 hours ago. I think you will see more of those coming,” Wright said.
The US president previously warned Iran that any move to block the maritime traffic of oil tankers through the Strait of Hormuz would trigger a “TWENTY TIMES HARDER” response by Washington.
West Texas Intermediate (WTI) for April’s settlements nosedived by 15.68% at 1:06 pm ET to sell for $79.91 per barrel. Meanwhile, Brent for May’s deliveries plunged by 15.23% to go for $83.89 per barrel.
The Ruwais refinery, the largest refinery in the United Arab Emirates, was the target of a drone strike on Tuesday, according to the Abu Dhabi Media Office. The extent of the damage is currently unknown and there are no reported casualties. The Abu Dhabi Media Office said emergency services are fighting a fire at the Ruwais Industrial Complex. The UAE authorities said they intercepted 26 out of 35 drones launched at their territory today, as well as eight ballistic missiles.
Iran has warned that “not a litre” of oil will be exported from the Middle East until the United States and Israel stop bombing it. The warning comes on the heels of statements made by President Trump that the war would be over “very soon”, which toppled oil prices from peaks reached on Monday. “We are the ones who will determine the end of the war,” a spokesman for the Islamic Revolutionary Guards Corps said in a statement today, as reported by Reuters. The threat followed remarks made by President Trump that included threats for the attacks to actually intensify if Iran continued to prevent oil from leaving the Middle East. “If Iran does anything that stops the flow of Oil within the Strait of Hormuz, they will be hit by the United States of America TWENTY TIMES HARDER than they have been hit thus far,” the U.S. president said on TruthSocial. “Additionally, we will take out easily destroyable targets that will make it virtually impossible for Iran to ever be built back, as a Nation, again — Death, Fire, and Fury will reign upon them — But I hope, and pray, that it does not happen!” Trump also wrote on his social network, adding that this was a gift from the U.S. to China and all other oil importers that bought Middle Eastern oil. The situation appears to be of the stalemate sort right now, which suggests the recent reversal of the oil rally may end, after traders rushed to sell on Monday, following Trump’s remark about the war ending “very soon”. The selloff pushed Brent crude and WTI below $100. The Strait of Hormuz remains effectively closed, prices will likely start climbing again although more slowly, if Trump goes ahead with the sanction-lifting on “some countries”.
The International Energy Agency (IEA) said on Monday that it discussed releasing emergency oil stocks with G7 finance ministers amid worsening conflict in the Middle East, which is increasing risks to global crude supplies. IEA Executive Director Fatih Birol said after the meeting, held at the invitation of French Minister Roland Lescure, that oil market conditions had deteriorated in recent days. “In addition to the challenges of transit through the Strait of Hormuz, a substantial amount of oil production has been curtailed. This is creating significant and growing risks for the market,” he said. Birol added that IEA member states hold more than 1.2 billion barrels of public emergency reserves, alongside another 600 million barrels of industry stocks under government obligation.
NN: Emergency reserves are enough to cover at best 24 days of Straights disruptions… A sick joke.
Saudi Arabia has started reducing oil production as the crucial Strait of Hormuz chokepoint remains at a near-standstill, even as the kingdom rushes to boosts exports through an alternative route. The information on the Saudi cuts, which comes from a person familiar with the operations, follows reductions by other OPEC nations including the United Arab Emirates, Kuwait and Iraq. Analysts estimate Saudi Arabia has larger storage capacity than some of its neighbors, indicating the kingdom may be pre-emptively lowering output to keep oil fields running for longer without having to completely shut them down. The oil-market’s worst fears have been realized this month as the war in the Middle East all-but closed Hormuz to shipping, forcing a swathe of massive projects to lower output and causing oil prices to surge above $100 a barrel. It’s thrown supply chains into chaos, and the longer the hostilities continue bigger the risks of a spike in global inflation. Saudi Arabia produces about 10 million barrels a day of oil and exports about 7 million a day. Aramco has been diverting some of those shipments away from its usual Hormuz route toward Yanbu in the Red Sea. But the pipeline that carries those volumes has capacity to transport 5 million barrels a day, which isn’t enough to fully replace the export volumes.
Derivatives marketplace CME Group revealed on Monday that its energy complex surpassed the previous daily record of 7.9 million contracts set on March 3, 2026, setting a new single-day volume record of 8.3 million contracts. Additionally, CME Group Refined Products established a new single-day record of 1.25 million contracts traded on March 3, 2026, driven by RBOB Gasoline and New York Harbor Ultra-low Sulfur Diesel (ULSD) futures and options. “As geopolitical shifts drive uncertainty throughout the global energy sector, market participants are turning to CME Group to manage their risk … In these volatile market conditions, clients continue to rely on our liquid markets and benchmark products to discover prices, hedge and adjust exposure within their portfolios,” Peter Keavey, Global Head of Energy Products at CME Group Peter Keavey noted.
Crude prices continued to soar as markets monitored the latest developments in the Middle East. Oil output in the Persian Gulf fell considerably as the Iran conflict prevented export through the Strait of Hormuz. However, United States President Donald Trump claimed that the “short-term oil prices” will go down as soon as Iran’s threat is neutralized. West Texas Intermediate (WTI) for settlements in April skyrocketed 27.61% at 10:45 pm ET, going for $116.04 per barrel, while Brent for deliveries in May jumped 25.07% and went for $116.74 per barrel.
As missiles and drones curtail energy production across the Persian Gulf, analysts warn that water, not oil, may be the resource most at risk in the energy-rich but arid region. On Sunday, Bahrain accused Iran of damaging one of its desalination plants. Earlier, Iran said a U.S. airstrike had damaged an Iranian plant. Hundreds of desalination plants sit along the Persian Gulf coast, putting individual systems that supply water to millions within range of Iranian missile or drone strikes. Without them, major cities could not sustain their current populations. In Kuwait, about 90% of drinking water comes from desalination, along with roughly 86% in Oman and about 70% in Saudi Arabia. The technology removes salt from seawater — most commonly by pushing it through ultrafine membranes in a process known as reverse osmosis — to produce the freshwater that sustains cities, hotels, industry and some agriculture across one of the world’s driest regions. For people living outside the Middle East, the main concern of the Iran war has been the impact on energy prices. The Gulf produces about a third of the world’s crude exports and energy revenues underpin national economies. Fighting has already halted tanker traffic through key shipping routes and disrupted port activity, forcing some producers to curb exports as storage tanks fill.
“Everyone thinks of Saudi Arabia and their neighbors as petrostates. But I call them saltwater kingdoms. They’re human-made fossil-fueled water superpowers,” said Michael Christopher Low, director of the Middle East Center at the University of Utah. “It’s both a monumental achievement of the 20th century and a certain kind of vulnerability.” The war that began Feb. 28 with U.S. and Israeli attacks on Iran has already brought fighting close to key desalination infrastructure. On March 2, Iranian strikes on Dubai’s Jebel Ali port landed some 12 miles from one of the world’s largest desalination plants, which produces much of the city’s drinking water. Damage also was reported at the Fujairah F1 power and water complex in the United Arab Emirates, and at Kuwait’s Doha West desalination plant. The damage at the two facilities appeared to have resulted from nearby port attacks or debris from intercepted drones. On Sunday, Bahrain accused Iran of indiscriminately attacking civilian targets and damaging one of its desalination plants, though it didn’t say supplies have gone offline. The island nation, home to the U.S. Navy’s Fifth Fleet, has been among the countries targeted by Iranian drones and missiles. Earlier, Iran said a U.S. airstrike damaged an Iranian desalination plant. Abbas Araghchi, the country’s foreign minister, said the strike on Qeshm Island in the Strait of Hormuz had cut into the water supply for 30 villages. He warned that in doing so “the U.S. set this precedent, not Iran.” Many Gulf desalination plants are physically integrated with power stations as co‑generation facilities, meaning attacks on electrical infrastructure could also hinder water production. Even where plants are connected to national grids with backup supply routes, disruptions can cascade across interconnected systems, said David Michel, senior fellow for water security at the Center for Strategic and International Studies. “It’s an asymmetrical tactic,” he said. “Iran doesn’t have the same capacity to strike back at the United States and Israel. But it does have this possibility to impose costs on the Gulf countries to push them to intervene or call for a cessation of hostilities.” Desalination plants have multiple stages — intake systems, treatment facilities, energy supplies — and damage to any part of that chain can interrupt production, according to Ed Cullinane, Middle East editor at Global Water Intelligence, a publisher serving the water industry. “None of these assets are any more protected than any of the municipal areas that are currently being hit by ballistic missiles or drones,” Cullinane said. Gulf governments and U.S. officials have long recognized the risks these systems pose for regional stability: if major desalination plants were knocked offline, some cities could lose most of their drinking water within days. A 2010 CIA analysis warned attacks on desalination facilities could trigger national crises in several Gulf states, and prolonged outages could last months if critical equipment were destroyed.
A leaked 2008 U.S. diplomatic cable warned the Saudi capital of Riyadh “would have to evacuate within a week” if either the Jubail desalination plant on the Gulf coast or its pipelines or associated power infrastructure were seriously damaged. Saudi Arabia has since invested in pipeline networks, storage reservoirs and other redundancies designed to cushion short-term disruptions, as has the UAE. But smaller states such as Bahrain, Qatar and Kuwait have fewer backup supplies.
During Iraq’s 1990-1991 invasion of Kuwait and the subsequent Gulf War, Iraqi forces sabotaged power stations and desalination facilities as they retreated, said the University of Utah’s Low. At the same time, millions of barrels of crude oil were deliberately released into the Persian Gulf, creating one of the largest oil spills in history. Yemen’s Houthi rebels have targeted Saudi desalination facilities amid regional tensions. The incidents underscore a broader erosion of long-standing norms against attacking civilian infrastructure, Michel said, noting conflicts in Ukraine, Gaza and Iraq. International humanitarian law, including provisions of the Geneva Conventions, prohibit targeting civilian infrastructure indispensable to the survival of the population, including drinking water facilities. The potential for harmful cyberattacks on water infrastructure is a growing concern. In 2023 and 2024, U.S. officials blamed Iran-aligned groups for hacking into several American water utilities. After a fifth year of extreme drought, water levels in Tehran’s five reservoirs plunged to some 10% of their capacity, prompting President Masoud Pezeshkian to warn the capital may have to be evacuated. Unlike many Gulf states that rely heavily on desalination, Iran still gets most of its water from rivers, reservoirs and depleted underground aquifers. The country operates a relatively small number of desalination plants, supplying only a fraction of national demand. Iran is racing to expand desalination along its southern coast and pump some of the water inland, but infrastructure constraints, energy costs and international sanctions have sharply limited scalability. “They were already thinking of evacuating the capital last summer,” Cullinane of Global Water Intelligence said. “I don’t dare to wonder what it’s going to be like this summer under sustained fire, with an ongoing economic catastrophe and a serious water crisis.”
The United Arab Emirates and Kuwait started reducing oil production, as the near-closure of the crucial Strait of Hormuz ripples through energy markets and affects global supply. Abu Dhabi National Oil Co. is “managing offshore production levels to address storage requirements,” the company said in a statement, without giving details. Kuwait Petroleum Corp. said it was lowering production at both its oil fields and refineries after “Iranian threats against safe passage of ships through the Strait of Hormuz.” The war in the Middle East has all but closed Hormuz, the narrow waterway linking the Persian Gulf to the open seas, to maritime traffic following Iranian threats to shipping. That’s clogged up exports from the world’s top oil-producing region and helped drive prices in London to the highest close in more than two years at almost $93 a barrel, sending consumers searching for alternatives and threatening to push global inflation higher.
Hostilities in the region have interrupted production and tanker traffic
Kuwait’s oil cutback started with about 100,000 barrels a day as of early Saturday and is expected to almost triple on Sunday, with further gradual reductions depending on storage levels and the status of Hormuz, a person with direct knowledge of the plan said, asking not to be named because the details are private.
The UAE, which pumped more than 3.5 million barrels a day as OPEC’s third-biggest producer in January, is using export capacity that bypasses the Strait of Hormuz, and its international storage facilities, to ensure supply to global markets. Adnoc operates a 1.5 million barrel-a-day pipeline to Fujairah on the UAE’s western coast to avoid the strait. Adnoc said its onshore operations are continuing normally. Cutbacks by the two OPEC members follow a swathe of others in the region. Iraq started holding back production earlier this week as storage tanks started filling up, while Saudi Arabia shut its biggest refinery and Qatar closed the world’s largest liquefied natural gas export plant after drone attacks. Kuwait Petroleum declared force majeure — a legal clause allowing a company not to fulfill contractual obligations because of circumstances outside its control — on sales of oil and refinery products, according to a notice seen by Bloomberg. The country produced about 2.57 million barrels a day of oil in January, according to data compiled by Bloomberg. The only route out for the supply is through the Strait of Hormuz. Saudi Arabia, the biggest producer in the region, has diverted some of its crude away from this route toward Yanbu in the Red Sea.
Hormuz halt may exhaust oil and fuel storage in weeks or days
Kuwait had earlier begun lowering processing rates at its refineries because of the fuller tanks. The nation’s plants — Al-Zour, Mina Al-Ahmadi and Mina Abdullah — have a combined capacity of about 1.4 million barrels a day. Al-Zour is one of the biggest oil-processing facilities in the Middle East. US President Donald Trump said he expects crude prices to drop at the end of the war, which he called a “minor excursion” that’s likely to continue “for a little while.” “We figured oil prices would go up, which they will,” Trump told reporters aboard Air Force One on Saturday. “They’ll also come down. They’ll come down very fast. And we will have gotten rid of a major, major cancer on the face of the Earth.” The UAE and Kuwait, like other Gulf nations, have been heavily targeted by Iranian missiles and drones in the region’s expanding war. The US embassy in Kuwait has been hit and the US consulate in Dubai targeted, along with other infrastructure in the two countries.