Published by Global Banking & Finance Review®
Posted on March 5, 2026
4 min readLast updated: April 1, 2026
Add as preferred source on GoogleTanker attacks in Gulf waters intensified the U.S.–Iran conflict, spreading into Azerbaijan and disrupting global oil and LNG supplies. Energy markets saw renewed surges amid fears of prolonged regional instability.
By Jonathan Saul and Anna Hirtenstein
March 5 (Reuters) - More tankers came under attack in Gulf waters on Thursday as the U.S.–Iran war escalated, and Iranian drones entered Azerbaijan, threatening to spread the crisis to more oil producers in the region.
A Bahamas-flagged crude oil tanker was targeted by an Iranian remote-controlled boat laden with explosives while anchored near Iraq's Khor al Zubair port, according to initial assessments. A second tanker at anchor off Kuwait was taking on water and spilling oil after a large explosion on its port side.
Nine vessels have come under attack since the conflict broke out between the U.S., Israel and Iran on Saturday. Iran launched a wave of missiles at Israel early on Thursday and also sent drones into Azerbaijan, injuring four people.
The escalation comes after a motion to halt the U.S. attacks was blocked in Washington and as the son of Iran's slain supreme leader emerged as a frontrunner to succeed him, suggesting Tehran was not about to buckle under the pressure.
Around 200 ships, including oil and liquefied natural gas tankers as well as cargo ships, remained at anchor in open waters off the coast of major Gulf producers, according to Reuters estimates based on ship-tracking data from the MarineTraffic platform.
Hundreds of other vessels remained outside the Strait of Hormuz unable to reach ports, shipping data showed. The waterway is a key artery for around a fifth of the world's oil and LNG supply.
President Donald Trump offered U.S. Navy escorts and insurance in a bid to restart shipping flows and curtail energy prices. Insurance market Lloyd's of London said on Thursday it is engaging with the U.S. government on a plan.
BP evacuated foreign staff from Iraq's Rumaila oil field after two unidentified drones landed inside the field, Iraqi oil sources said. Iraq has cut its oil production by nearly 1.5 million barrels a day as it ran out of storage and was unable to load tankers, officials told Reuters.
A refinery in Kuwait shut down and another reduced its processing rate. A third refinery in Bahrain also cut its output.
OIL PRICES JUMP AGAIN
Oil prices extended their rally on Thursday, with Brent climbing 3% and WTI rising 4%. They have both jumped 16% since the war started on Saturday, as U.S.-Israeli strikes on Iran disrupted Middle East supplies.
A benchmark European gas price gained around 3% on Thursday. It has surged nearly 60% so far this week.
Russian President Vladimir Putin said his country could halt gas supplies to Europe right now, amid the spike in energy prices from the Iran crisis.
Qatar, which provides 20% of the world's LNG supply, halted gas production earlier this week due to the conflict. Other major producers such as the U.S. and Australia have little spare capacity to offset this lost supply, according to Reuters calculations and industry analysts.
The EU's task of refilling its gas storage in the coming months has become riskier and more expensive due to the Iran conflict and disrupted LNG supplies. It still imports some gas from Russia, planning to end pipeline supply by late 2027 and ban new short-term LNG contracts from late April 2026.
Asian importers came under further pressure from the disruptions in supply from the Middle East. China asked refiners not to sign new contracts to export fuel and to try to cancel shipments already committed, several people with knowledge of the matter said on Thursday.
(Reporting by Jonathan Saul in London; Additional reporting by Nailia Bagirova in Baku, Aref Mohammed in Basra and Ahmed Rasheed in Baghdad; Writing by Anna Hirtenstein; Editing by Susan Fenton and Gareth Jones)
Nine vessels have come under attack since the conflict broke out between the US, Israel, and Iran.
Oil prices have jumped over 14% since the conflict started, with a further 3% increase on Thursday.
Around 200 ships, including oil and LNG tankers, are anchored off Gulf ports, with many unable to reach ports due to the conflict.
The disruption has made EU gas refilling riskier and affected LNG supplies to Asian importers, driving up global energy prices.
BP evacuated foreign staff from Iraq's Rumaila oil field after two unidentified drones landed inside the field.
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