Oil holds above $100, stocks fall as Iran leader targets Hormuz

The US-Israeli war on Iran has expanded across the Gulf and beyond, upending global energy markets and trade, and virtually halting traffic in the Strait of Hormuz, through which a fifth of the world’s crude oil travels. Oil prices held around $100 (R1,680) on Friday, and most equity markets dropped after Iran’s leader called for the blocking of the crucial Strait of Hormuz and the opening up of new fronts in the war against the United States and Israel. With the conflict heading towards its third week and showing no signs of ending, investors are growing increasingly worried about an extended crisis that could fan inflation and hammer the global economy.

Tehran has targeted energy facilities this week across the Gulf, with ships hit near Iraq, fuel tanks attacked in Bahrain and drones fired at oil fields in Saudi Arabia. And it warned on Thursday that it would “set the region’s oil and gas on fire” if its own energy infrastructure and ports were targeted. In his first public comments since succeeding his father four days ago, Ayatollah Mojtaba Khamenei said the Strait of Hormuz — through which a fifth of global oil and gas passes — must remain effectively shut.

“The lever of blocking the Strait of Hormuz must definitely be used,” Khamenei said in a message read by an anchor on state television. He also said “studies have been conducted into opening other fronts where the enemy has little experience and would be highly vulnerable, and their activation will take place if the state of war persists”. Crude surged more than nine percent Thursday, with Brent ending above $100 for the first time since 2022 when Russia launched its invasion of Ukraine.

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Brent is up around 40 percent since the Middle East war began on February 28. And it held there in early Friday business, with analysts saying the record 400 million barrels released from International Energy Agency stockpiles had little impact. The IEA said Thursday that the war “is creating the largest supply disruption in the history of the global oil market”. Meanwhile, Donald Trump has faced intense political pressure as the global economic fallout of the crisis has mounted, while markets have brushed off his assertions that the battle would be short-lived.

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