By Bo Erickson, Parisa Hafezi, Maya Gebeily and Alexander Cornwell
WASHINGTON/DUBAI/JERUSALEM, March 14 (Reuters) - U.S. President Donald Trump threatened to strike the oil infrastructure of Iran's Kharg Island hub unless Tehran stopped attacking vessels in the Strait of Hormuz, a warning that could further roil markets coping with a historic supply disruption.
Trump paired his ultimatum with a social media post saying the United States had "totally obliterated" military targets on the island, the export terminal for 90% of Iran's oil shipments, which lies about 300 miles (500 km) northwest of the strait.
U.S. strikes did not target Kharg's oil infrastructure, but "should Iran, or anyone else, do anything to interfere with the Free and Safe Passage of Ships through the Strait of Hormuz, I will immediately reconsider this decision," Trump wrote.
IRAN SHOWS NO SIGN OF CAPITULATION AS STRIKES SPREAD
Iran could not defend against U.S. attacks, the president said. "Iran’s Military, and all others involved with this Terrorist Regime, would be wise to lay down their arms, and save what’s left of their country, which isn’t much!" he posted on his Truth Social platform.
He later posted: "The Fake News Media hates to report how well the United States Military has done against Iran, which is totally defeated and wants a deal - But not a deal that I would accept!"
Iran, however, showed no sign of capitulating or bowing to U.S.-Israeli military pressure.
Iran's armed forces responded to the Kharg attack by saying any strike on their country's oil and energy infrastructure would lead to strikes on facilities owned by oil companies cooperating with the United States in the region, Iranian media reported.
Iran's semi-official Fars news agency reported, citing sources, that more than 15 explosions were heard on the island during the U.S. attacks. The sources said air defenses, a naval base and airport facilities were hit, but there was no damage to oil infrastructure.
Markets were watching for any sign that U.S. strikes had damaged the island's intricate network of pipelines, terminals and storage tanks. Even minor disruptions could further tighten global supply, adding pressure to a volatile market.
Oil prices have swung sharply on Trump's changing comments about the likely duration of the war, which began on February 28 with massive U.S. and Israeli bombardments of Iran and quickly spread into a regional conflict with broad consequences for worldwide energy and stock markets.
The U.S. embassy in the Iraqi capital Baghdad was hit in a missile attack on Saturday, causing smoke to rise from the building, Iraqi security sources said. They did not have further details on the strike.
In other attacks across the region, Iran's Revolutionary Guards said they had carried out additional attacks on Israel with Lebanon's Hezbollah militia, Iran's Tasnim news agency reported.
Lebanon has become an escalating flashpoint in the war with Israel's military and Hezbollah forces exchanging strikes in and around Beirut.
On Friday, the Israeli military said its air force had struck more than 200 targets in western and central Iran over the past day, including ballistic missile launchers, air-defense systems and weapons production sites.
GULF, LEBANON BECOME FLASHPOINTS
After two weeks of war, 2,000 people have been killed, most in Iran but many in Lebanon and a growing number in the Gulf. Several million people have been displaced from their homes.
U.S. forces have suffered casualties, including the deaths of all six crew members aboard a refueling aircraft that crashed in western Iraq.
Five U.S. Air Force tankers at a base in Saudi Arabia were damaged by an Iranian missile strike and were being repaired, the Wall Street Journal reported, citing U.S. officials.
In addition to Iran's missile and aerial drone attacks on Israel and Gulf state allies of the U.S., Iran's Islamic Revolutionary Guard Corps has sought to disrupt shipping through the Strait of Hormuz, a conduit for 20% of the world's fossil energy supplies.
Trump told reporters on Friday the U.S. Navy will "soon" start escorting tankers through the waterway.
Although he has previously said the war would last only weeks, Trump on Friday declined to publicly project an end date for the conflict, telling reporters: "It'll be as long as it's necessary."
Iran continued to export crude oil while other producers in the Gulf halted their shipments for fear of Iranian attacks.
Multiple very large crude oil tankers were loading at Kharg on Wednesday, according to satellite imagery reviewed by TankerTrackers.com. Iran exported between 1.1 million barrels per day and 1.5 million bpd from February 28 to Wednesday.
Bob McNally, president of Rapidan Energy Group, said Trump's comments on Friday "will focus the market's mind on pathways that this energy disruption, already history's largest, could expand and last longer."
Some energy industry observers expressed doubts that Kharg's oil facilities would stay intact.
“Bombing Kharg Island but not the oil infrastructure is like going to McDonald's and getting a hamburger with no meat,” said Josh Young, chief investment officer at Bison Interests. "What's the point?"
Iran's new supreme leader, Mojtaba Khamenei, in his first public comments on Thursday, vowed to keep the Strait of Hormuz shut and urged neighboring countries to close U.S. bases on their territory or risk being attacked themselves.
(Reporting by Reuters bureaux; Writing by Steve Gorman, Simon Lewis and Stephen Coates; Editing by Sergio Non)
