Oil hits $86 as US-Iran strikes target Kuwaiti energy and water plants
Escalating U.S.-Iranian strikes on critical infrastructure in Kuwait have pushed oil prices above $86 a barrel and virtually halted traffic through the Strait of Hormuz, severely disrupting global energy supplies.
The United States and Iran exchanged attacks on infrastructure and military targets on Saturday, pushing oil prices above $86 a barrel. The escalation follows the collapse of an interim ceasefire, leaving no clear resolution to a conflict that has effectively closed the Strait of Hormuz since late February.
The most consequential economic damage occurred in Kuwait, where Iranian strikes hit an oil facility and a water desalination plant, according to Kuwaiti authorities and the state petroleum corporation. The attack triggered a fire at the desalination facility and forced several power generation units offline. It marked the second strike on a desalination plant in two days for the desert nation, which relies on the technology for 90 percent of its drinking water.
Kuwait briefly closed its airspace and its national carrier rescheduled most flights to the capital. The disruption to regional logistics comes as shipping through the Strait of Hormuz plummets. Just eight vessels crossed the critical waterway on Thursday, a three-week low tracked by MarineTraffic.com. Before the war began on February 28, the strait carried a fifth of the world’s crude oil.
While regional energy pipelines are absorbing some volume, they cannot offset the lost maritime capacity. Iran has declared the strait must be under its sole control and is demanding transit fees, leveraging the shipping shutdown to gain leverage in negotiations. The U.S. has responded by reimposing a naval blockade on Iranian ports to halt its crude exports.
The conflict is spreading. Iraq downed drones over Irbil, while Jordan, Bahrain, and Saudi Arabia reported intercepting missiles or sounding air raid sirens. U.S. Central Command said its seventh consecutive night of strikes targeted Iranian logistics, weapons storage, and maritime capabilities. In return, Iranian state media reported that U.S. airstrikes hit an electricity and desalination plant in the southern Hormozgan province, alongside tunnels and a bridge disrupting the main highway to the port city of Bandar Abbas.
The expanding targeting of dual-use infrastructure is raising the long-term risk premium for regional energy assets. In a Thursday address, President Donald Trump insisted the campaign was succeeding. “We are likewise winning big in Iran, and you will see the fruits of that labor very, very shortly,” he said. However, the destruction of water and power grids signals a protracted economic siege that runs counter to his previous pledges to avoid prolonged Middle Eastern wars.
