Iran fires back at bases, ships despite intensive strikes

Iran fired at Israel and targets across the Middle East on Wednesday, while at least three ships were hit in the Gulf, demonstrating Tehran can still fight back and disrupt energy supplies despite the most intense US-Israeli strikes yet. Oil prices that shot up earlier this week have eased and stock markets have rebounded, with investors betting for now that US President Donald Trump will find a quick way to end the war he began alongside Israel nearly two weeks ago.

But so far there has been no let-up on the ground, or any sign that ships can safely sail through the Strait of Hormuz, where a fifth of the world’s oil has been blockaded behind a narrow channel along the Iranian coast in the worst disruption to energy supplies since the oil shocks of the 1970s.

The Pentagon described its attacks on Iran on Tuesday as the most intensive of the war so far. After offices of a bank in Tehran were hit overnight, Iran’s military command said it would respond with attacks on banks that do business with the United States or Israel. People across the Middle East should stay away 1,000 metres from banks, it added.

In the latest public display of defiance, huge crowds of Iranians took to the streets on Wednesday for funerals for top commanders killed in airstrikes. They carried caskets and brandished flags and portraits of slain Supreme Leader Ali Khamenei and his son and successor, Mojtaba.

A source told Reuters that Israel believed Mojtaba Khamenei had been injured early in the war, when airstrikes killed his father, mother, wife and a son. Reuters was unable to confirm his condition, but state media have used a term that means “wounded veteran” to describe him. He has not appeared in public or issued any direct message since the war began.

The Iranian military said on Tuesday it had launched missiles at a US base in northern Iraq, the US naval headquarters for the Middle East in Bahrain, and at Be’er Ya’akov city in central Israel.

Explosions rang out in Bahrain, while in Dubai four people were injured by two drones that crashed near the airport.

In Tehran, residents said they were growing accustomed to the nightly airstrikes that have sent hundreds of thousands of people fleeing to the countryside and contaminated the city with black rain from oil smoke.

“There were bombings last night but I did not get scared like before. Life goes on,” Farshid, 52, told Reuters by phone.

Three more merchant ships were struck in the Gulf by unknown projectiles, according to agencies that monitor maritime security, raising the number of ships reportedly hit since the war began to 14.

Crew were evacuated from a Thai-flagged bulk freighter after an explosion caused a fire. A Japan-flagged container ship and a Marshall Islands-flagged bulk carrier also sustained damage.

Oil prices, which shot up briefly to nearly $120 a barrel on Monday, have since settled around $90, suggesting investors are betting Trump will be able to halt the war and reopen the strait before an oil supply shock causes an economic meltdown.

Sources said the International Energy Agency would recommend releasing 400 million barrels from global strategic reserves to stabilise prices, by far a record. That would take months and amount to just three weeks’ flow through the strait.

US and Israeli officials say their strikes have severely damaged Iran’s missile and drone capabilities, as well as decapitating its leadership. Their stated aim is to end Iran’s ability to project force beyond its borders and destroy its nuclear programme, though they have also invited Iranians to topple the country’s clerical rulers. Israel’s Defence Minister Israel Katz said on Wednesday the operation “will continue without any time limit, as long as required, until we achieve all objectives and win the campaign.”

But the longer the war goes on, the greater the risk to the global economy, and if it ends with Iran’s system of clerical rule still in place Tehran is certain to declare victory.

While many Iranians want change and some openly celebrated the death of the supreme leader whose security forces killed thousands of anti-government protesters just weeks ago, there has been no sign of protest since the war began. Iran’s police chief Ahmadreza Radan said on Wednesday anyone taking to the streets would be treated “as an enemy not a protester. All our security forces have their fingers on the trigger.”

Reuters