U.S. steps up Iran strikes as oil markets face growing supply disruptions

(Bloomberg) — The Pentagon said the U.S. carried out its most intense day of strikes against Iran on Tuesday, signaling the conflict may continue despite earlier comments from President Donald Trump suggesting the war could end soon.

Defense Secretary Pete Hegseth said during a press briefing that the U.S.-Israeli campaign, which began Feb. 28, will continue until Iran’s military capability is significantly degraded. The escalation suggests the conflict could continue to disrupt global oil markets and energy infrastructure across the Middle East.

Hostilities have already triggered major disruptions to the region’s oil industry. The Strait of Hormuz — a critical artery for global crude shipments — remains effectively closed to most commercial shipping, creating export bottlenecks and forcing several Gulf producers to curb output as storage tanks fill.

Regional producers including Saudi Arabia, Iraq, the United Arab Emirates and Kuwait have collectively reduced production by as much as 6.7 MMbpd, according to people familiar with the matter — roughly 6% of global oil supply.

Energy infrastructure has also been affected. The Ruwais refinery complex in the United Arab Emirates temporarily halted operations after a drone strike sparked a fire in a nearby industrial area, according to people familiar with the situation. Abu Dhabi National Oil Co. is assessing damage at the facility.

The disruption has injected extreme volatility into oil markets. Brent crude briefly surged to nearly $120 per barrel earlier this week before retreating to around $91 after Trump suggested the war could soon conclude. Even at those levels, prices remain more than 50% higher than at the start of the year.

Saudi Aramco Chief Executive Officer Amin Nasser described the situation as “the biggest crisis the region’s oil and gas industry has faced.”

Washington has said it plans to deploy U.S. Navy escorts for tankers attempting to transit the Strait of Hormuz in an effort to restore some shipping flows. However, analysts say normal traffic through the chokepoint — which typically handles about one-fifth of the world’s oil trade — is unlikely to resume until hostilities ease.

Fighting continued across the region into an 11th day Tuesday. U.S. and Israeli forces carried out overnight strikes inside Iran, while Tehran launched drones and missiles targeting Israel and several Gulf states. The United Arab Emirates said it intercepted an Iranian missile, while Kuwait reported shooting down six drones.

Iranian officials have shown little interest in negotiations. Foreign Minister Abbas Araghchi said talks with the U.S. are “not on our agenda,” while Parliament Speaker Mohammad Bagher Qalibaf said the country is “absolutely” not seeking a ceasefire.

Trump has suggested the military campaign has already achieved significant objectives, telling lawmakers the U.S. and Israel have struck roughly 5,000 targets and sharply reduced Iran’s missile capabilities.

Still, the risk of further escalation remains high, with regional attacks continuing and NATO reinforcing air defenses in southeastern Turkey.

The conflict has already taken a heavy human toll, with more than 1,300 deaths reported in Iran, alongside casualties in Israel and several Gulf states.

For energy markets, the key uncertainty remains the duration of the conflict — and how long shipping through the Strait of Hormuz remains disrupted. The longer exports remain constrained, analysts warn, the greater the risk of sustained production shut-ins and further volatility in global oil prices.