Energy infrastructure and civilian facilities have successively become targets of attacks, marking a new and dangerous phase in the US-Iran conflict.
Kuwait stated on Friday that Iran has expanded its attacks to include Kuwait's power and desalination plants. An Iraqi official said on Thursday that the largest gas field in the country's northern Kurdistan region was shut down due to a credible threat of attack, while US airstrikes extended their reach to Chabahar port, located over 350 miles from the Strait of Hormuz. Neither side shows any sign of backing down.
According to data from market intelligence firm Kpler cited by Xinhua News Agency, the number of vessels transiting the Strait of Hormuz fell to a three-week low on Thursday.
Xinhua noted that analysis suggests attacks on ships and US military blockade actions have further increased market uncertainty. Although regional mediation efforts continue, changes in commercial shipping activity indicate that the current military conflict is influencing shipping companies' operational decisions more significantly than diplomatic progress.
International crude oil futures surged by double digits this week. By Friday's close, front-month contracts for Brent and WTI crude had gained approximately 15.9% and 15.5% respectively for the week, both closing at one-month highs for the fourth consecutive day.
The performance of oil prices shows the market is accelerating its pricing of concerns over further spillover of the conflict. This round of escalation is no longer confined to bilateral military confrontation but has begun to affect the civilian lifelines and energy arteries of surrounding nations. Saeid Golkar, an Iran security expert at the University of Tennessee at Chattanooga, warned that escalation is rapidly spiraling out of control, stating, "Even if neither side wants a full-scale war, we are facing the risk of returning to full-scale war."
Civilian Infrastructure Targeted for the First Time
Media analysis suggests the most significant change in this round of US-Iran escalation is that the conflict has crossed a previously tacitly observed "civilian red line."
The Kuwaiti government stated on Friday that an Iranian drone attack damaged a power and desalination plant in the country. Coming during a summer heatwave, the attack forced Kuwait to activate emergency contingency plans and was highly provocative. The Kuwaiti military said it had intercepted 32 drone incursions since early Thursday.
Simultaneously, according to Iraqi officials, drones attacked an oil tanker and a container ship at a southern Iraqi port, as well as the northern Kurdistan region on Thursday. The region's largest gas field subsequently announced its closure due to a "credible threat of attack." The Iraqi Kurdistan region reported more drones were intercepted over its capital, Erbil, on Friday. No party has claimed responsibility for the attacks within Iraq, though Iran and its local allies have frequently launched drone attacks in the region previously.
Iran has also begun to include Qatar and Oman—two nations actively involved in diplomatic mediation—within its attack scope and has continued to intensify attacks on passing vessels.
US Military Strikes Extend Inland, Chabahar Port Hit
The US military has similarly breached previous operational boundaries, extending its strikes from the Strait coastline deep into Iran's interior.
US Secretary of Defense Hagerthe publicly released photos of a collapsed maritime communications tower at Chabahar port. The port is located over 350 miles east of the Strait of Hormuz, near the Pakistani border, and is Iran's only deep-water ocean port. Iranian authorities confirmed the facility was attacked, insisting it was used solely for civilian purposes, including maritime search and rescue operations for fishing vessels. Chris Long, a former British naval officer who served in the Persian Gulf, stated the communications tower could also serve observation and intelligence-gathering functions.
At Bandar Abbas on the other side of the Strait of Hormuz, US forces conducted strikes on multiple bridges over several nights, aiming to sever supply routes to this strategic port and naval base. Iran's state broadcaster IRIB reported several bridges in and around Bandar Abbas were attacked, and roads connecting the port city to neighboring provinces were declared closed.
According to The Wall Street Journal, citing a senior US official, Iran has used facilities at this port to launch attacks on ships. Bandar Abbas normally handles 90% of Iran's container traffic.
It is reported that US forces have now conducted airstrikes for six consecutive days, the largest escalation since the initial agreement was signed in June. Beyond bridges, targets have included weapons and surveillance systems Iran uses to attack commercial vessels, encompassing small fast-attack craft, coastal radar stations, air defense systems, and missile and drone storage facilities.
Iran Reports Striking Unauthorized Vessel, US Claims Six Ships Intercepted in Three Days of Blockade
The deepening military conflict is directly impacting global energy markets.
According to ship-tracking data from Kpler, traffic through the Strait of Hormuz has fallen to a three-week low, with half of the current transiting vessels being Iranian-flagged, and most traffic passing through the Iranian side of the shipping lane.
Data released by Kpler on Friday showed vessel transit activity in the Strait of Hormuz continued to weaken on Thursday, with the confirmed number of vessels passing through the strait that day dropping to 8, the lowest level in nearly three weeks.
Kpler data indicates that 7 of the 8 vessels passing through the Strait of Hormuz that day chose the shipping lane on the Iranian side, reflecting that shipping companies, after reassessing regional security, crew safety, and insurance risks, are further concentrating vessel traffic on this route.
Citing Iranian sources, a news report stated a source claimed a vessel was struck by Iranian forces in the Strait of Hormuz that day. The vessel was reportedly Thai-flagged, ignored warnings, and attempted to transit the strait without permission from Iran's Islamic Revolutionary Guard Corps Navy. It was subsequently intercepted and hit by the IRGC Navy.
Separately, according to a report from UK Maritime Trade Operations (UKMTO), affiliated with the British Royal Navy, another vessel near the Strait of Hormuz was attacked by an unidentified projectile on Friday.
Additionally, the US Central Command stated on Friday that US forces are strictly enforcing the maritime blockade against Iran and maintaining a high state of alert. The US Central Command said that in the three days since resuming the maritime blockade on Iran starting the 14th, US forces have forced 4 commercial vessels to change course, disabled 1 vessel, and boarded another for inspection to ensure full compliance with the blockade regulations.
International oil prices have gained over 10% cumulatively this week. Former US President Trump had previously explicitly stated his concern over the impact of rising oil prices on the global economy.
The origin of this round of conflict can be traced to a memorandum of understanding signed between Trump and Iran a month ago. The agreement was originally intended to open transit through the Strait of Hormuz but collapsed last week after Iran launched a new round of attacks against US operations attempting to escort vessels along the Omani coast. Iran insists the agreement granted it the right to manage strait transit traffic and required vessels to use the northern shipping lane along the Iranian coast.
Both Sides Have Incentives for Restraint, But Spiral Escalation Risk Rises
Despite the ongoing deterioration, both sides still have practical reasons to avoid all-out war.
Iran faces immense pressure for post-war reconstruction and growing domestic public dissatisfaction with the government. The Trump administration faces political pressure from the impact of soaring oil prices on the US economy.
US officials indicated earlier this week that Trump favors expanding military operations to break the diplomatic deadlock. According to flight-tracking data and a source familiar with the matter, the US is redeploying jet fighters from Europe to the Middle East. Furthermore, over 2,000 Marines from the 11th Marine Expeditionary Unit are operating in the region, with military-released photos showing them conducting a boarding inspection of a merchant ship in the Gulf of Oman to strengthen enforcement of the blockade on Iranian ports.
Trump stated in a prime-time television address on Thursday evening, "We have also had great success in Iran, and you will see the fruits of these efforts very soon."
However, Saeid Golkar's assessment is more cautious. He points out that Tehran's consistent strategy is to overwhelm the opponent with higher-intensity escalation and wear down the US through a protracted conflict. As both sides seek leverage and neither is willing to back down first, the risk of an uncontrollable escalation spiral has become a core risk the market cannot ignore.
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