Iran vows revenge as Gulf impact widens; Fujairah port resumes

The Israeli military said it had killed two senior Iranian intelligence officials in strikes on Tehran, while Iranian authorities vowed retaliation, escalating tensions across the Gulf.

According to military statements and regional reporting, the strikes targeted high-level intelligence and missile-related figures inside Iran; Tehran confirmed casualties among senior security and defence personnel and pledged to respond. Separately, debris from intercepted projectiles caused a fire in the Fujairah oil industry zone in the United Arab Emirates, disrupting bunker and loadings at storage terminals before some berths were declared ready to resume operations by terminal operators and shipping advisers.

Markets reacted swiftly: global crude benchmarks recorded sharp risk-premium increases as shipping through the Strait of Hormuz and regional export routes faced interruption. The temporary hit to Fujairah’s loading capacity fed immediate strain into bunker supplies and refined product logistics, amplifying volatility in both spot and futures markets for crude and refined fuels. Traders and refiners reassessed near-term supply chains as headline risk intensified.

In a wider economic context, the disruption highlights the vulnerability of Gulf transit routes and the limited spare capacity outside the main seaborne corridors. The partial restart of Fujairah terminals provided some operational relief, but analysts stress that prolonged insecurity or further strikes on terminals and pipelines would sustain a material premium on oil and LNG markets, with knock-on effects for global inflation and shipping costs.

Market strategists expect continued high volatility and recommend that energy-sector participants revise hedging and contingency plans. Near-term price direction will hinge on the duration of the disruption, the extent of any additional infrastructure damage, and diplomatic or military measures that might reopen sea lanes; institutional participants are monitoring inventory draws, rerouting costs and potential releases from strategic petroleum reserves as policy options to stabilize markets.