As the U.S.–Iran war intensified on Thursday, more oil tankers came under attack in Gulf waters, while Iranian drones crossed into Azerbaijan—raising fears that the conflict could spill over and pull more of the region’s major oil producers into the crisis.
A Bahamas-flagged crude tanker was struck by an Iranian remote-controlled boat packed with explosives while anchored near Iraq’s Khor al Zubair port, according to preliminary assessments. In a separate incident, another tanker anchored off Kuwait began taking on water and spilling oil after a powerful blast ripped through its port side. (Editor’s note: This Reuters wrap-up was published at 3:19 p.m. on March 5.)
Since fighting erupted between the United States, Israel, and Iran on Saturday, at least nine vessels have come under attack. Early Thursday, Iran unleashed another wave of missiles toward Israel and sent drones across the border into Azerbaijan, leaving four people injured and heightening fears that the conflict is widening.
The escalation comes after lawmakers in Washington blocked a motion to halt U.S. strikes, while the son of Iran’s slain supreme leader has emerged as a leading contender to succeed him—signaling that Tehran has little intention of backing down under mounting pressure.
Roughly 200 vessels—including oil tankers, liquefied natural gas carriers, and cargo ships—were sitting idle in open waters off the coasts of major Gulf producers, according to Reuters estimates based on ship-tracking data from MarineTraffic, underscoring how sharply the conflict has disrupted one of the world’s most critical energy corridors.
Hundreds of other vessels were stranded outside the Strait of Hormuz, unable to reach nearby ports, according to shipping data. The chokepoint is one of the world’s most critical energy corridors, carrying roughly a fifth of global oil and liquefied natural gas supplies.
President Donald Trump has offered U.S. Navy escorts and government-backed insurance in an effort to get shipping moving again and ease pressure on energy prices. On Thursday, the insurance market Lloyd’s of London said it is already in talks with the U.S. government about the proposed plan.
BP evacuated its foreign staff from Iraq’s Rumaila oil field after two unidentified drones landed inside the facility, according to Iraqi oil sources. Meanwhile, officials told Reuters that Iraq has slashed oil production by nearly 1.5 million barrels per day after storage filled up and tankers were unable to load—another sign of how severely the conflict is choking the region’s energy flows.
One refinery in Kuwait has shut down entirely, while another has scaled back its processing rate. In Bahrain, a third refinery has also reduced output—signaling how quickly the escalating conflict is beginning to disrupt the region’s energy infrastructure.
Oil Prices Surge Again as Middle East Tensions Intensify
Oil prices surged again on Thursday, with Brent crude climbing 3% and U.S. West Texas Intermediate jumping 4%. Since the war erupted on Saturday, both benchmarks have soared about 16%, as U.S.–Israeli strikes on Iran rattle Middle East energy supplies and jolt global markets.
A key European benchmark for natural gas rose about 3% on Thursday, extending a stunning rally that has already pushed prices nearly 60% higher so far this week as energy markets reel from escalating tensions.
Russian President Vladimir Putin said Moscow could halt gas supplies to Europe immediately as energy prices surge in the wake of the Iran crisis, signaling that Russia may redirect its exports to markets willing to pay higher prices.
Asian energy importers faced mounting pressure as Middle East supply disruptions rippled across global markets. In response, China has instructed refiners not to sign new fuel export contracts and to try to cancel shipments already committed, several people familiar with the matter said on Thursday—an unusual move that underscores growing concern over tightening supplies.
Photograph: An Iranian flag is placed among the ruins of a police station struck on March 2, 2026 during the U.S.–Israeli military campaign in Tehran, Iran; the photo was taken on Tuesday, March 3, 2026. (AP Photo/Vahid Salemi)
