Iran Keeps Striking Gulf as Israel Pledges to Spare Energy Sites

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(Bloomberg) — Iran pressed ahead with attacks on Arab states in the Persian Gulf even after Israel signaled it would refrain from hitting the Islamic Republic’s energy infrastructure, fueling volatility in markets roiled by the war in the oil-rich region.

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Kuwait shut several units at its Al Ahmadi refinery after multiple strikes. The United Arab Emirates and Saudi Arabia said they intercepted missiles and drones overnight into Friday, while Bahrain reported a fire at a warehouse.

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Israel said it struck infrastructure across Iran, including in the capital Tehran, while the Islamic Republic launched a fresh wave of retaliatory missile attacks. 

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The fighting, which has dragged on for three weeks, has killed more than 4,200 people across the region and brought shipping through the strategic Strait of Hormuz — a chokepoint for about a fifth of global oil and LNG flows — to a near standstill. Iran’s attacks on critical energy sites have eased from a peak earlier this week, helping push oil prices lower after they hit an almost four-year high.

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Still, risks of lasting damage to energy supplies remain, with Qatar saying almost a fifth of its LNG production has been knocked out for as long as five years. The fallout of the war is spreading globally, with fuel, shipping and household costs already rising.

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Israel said it would no longer target energy infrastructure after an attack on Iran’s largest gas field sparked retaliatory strikes and elicited a rebuke from US President Donald Trump.

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“Israel acted alone,” Prime Minister Benjamin Netanyahu told a press conference on Thursday, after Israeli officials previously said they had informed the US about the hit on the South Pars field.

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Netanyahu also said Israeli forces would aid US efforts to reopen the Strait of Hormuz and that the war would be over sooner than some anticipated — comments that helped calm markets on a day when energy prices had spiked once again.

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“I told him, ‘don’t do that.’ And he won’t do that,” Trump said at the White House on Thursday referring to Netanyahu. “We get along great. It’s coordinated. But on occasion, he’ll do something, and if I don’t like it, then — so we’re not doing that.”

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For Washington, the costs of the Iran campaign it launched alongside Israel on Feb. 28 are becoming clearer. On Thursday, Iran said its air defense “seriously damaged” a US F-35 stealth fighter, with US Central Command saying one of the warplanes made an emergency landing and the pilot was in stable condition. 

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The Pentagon has asked Congress for an additional $200 billion to pay for the war, a person familiar with the matter said. The enormous funding request suggested the US is girding for a protracted conflict, though Defense Secretary Pete Hegseth downplayed such concerns and said the US was “on plan” with its war goals.