Iran targets Azerbaijan with drones and bombs Gulf tankers. Now the war is dragging in countries that never signed up

The conflict between the U.S., Israel, and Iran has grown significantly, with more tankers coming under attack in Gulf waters on Thursday and Iranian drones pushing into Azerbaijan. A Bahamas-flagged crude oil tanker was hit by an Iranian remote-controlled boat packed with explosives while anchored near Iraq’s Khor al Zubair port. 

Shortly after, a second tanker anchored off Kuwait began taking on water and spilling oil following a large explosion on its port side. In total, nine vessels have been attacked since the conflict began on Saturday. According to Reuters, Iran also launched a barrage of missiles at Israel early on Thursday and sent drones into Azerbaijan, injuring four people there. This latest surge in aggression comes after a motion to halt U.S. attacks was blocked in Washington.

The son of Iran’s slain supreme leader is also emerging as a top contender to succeed him, suggesting Tehran is not planning to back down under pressure. Around 200 ships, including large oil and liquefied natural gas (LNG) tankers and cargo vessels, are currently stuck at anchor in open waters off the coast of major Gulf producers. 

The energy crisis is already hitting production, prices, and supply chains across the world

Hundreds of other vessels are waiting outside the Strait of Hormuz, which carries about a fifth of the world’s oil and LNG supply. To address the shipping crisis, President Donald Trump offered U.S. Navy escorts and insurance to get shipping flows moving again and bring down energy prices. 

Trump has also faced scrutiny over how his aggressive stance toward Iran shifted the conflict. Lloyd’s of London confirmed on Thursday that it is already engaging with the U.S. government on a plan. BP evacuated its foreign staff from Iraq’s Rumaila oil field after two unidentified drones landed inside the field, according to Iraqi oil sources. 

Iraq has slashed its oil production by nearly 1.5 million barrels a day because it ran out of storage and could not load tankers, officials stated. Refinery shutdowns are also being reported in Kuwait and Bahrain, with others reducing their processing rates.

Oil prices are rising sharply, with Brent crude climbing 3% and West Texas Intermediate (WTI) rising 4% on Thursday alone. Both benchmarks have surged 16% since the conflict began on Saturday, as U.S.-Israeli strikes on Iran continue to disrupt Middle East supplies. A benchmark European gas price gained around 3% on Thursday and has risen nearly 60% so far this week.

Russian President Vladimir Putin suggested his country could halt gas supplies to Europe, adding further pressure to the energy market. Qatar, which supplies 20% of the world’s LNG, halted its gas production earlier this week due to the conflict. As world leaders weigh in on the crisis, Pope Leo’s appeal for moral responsibility after the Iran strikes has drawn attention from across the globe.

Other major producers like the U.S. and Australia have very little spare capacity to offset this lost supply, according to industry analysts. This makes the EU’s task of refilling its gas storage in the coming months riskier and more expensive. Asian importers are also being affected, with China reportedly asking its refiners not to sign new contracts to export fuel and to try to cancel shipments already committed to.