By Bo Erickson, Jaidaa Taha, 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 Friday ultimatum with a social media post saying the U.S. 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.
As the war entered its third week, Iran, however, struck a defiant note, playing down the extent of the damage on Kharg while threatening to step up its use of more powerful weapons and warning parts of the United Arab Emirates were a legitimate target.
"We declare to the leaders of the UAE that Iran considers it a legitimate right to defend its national sovereignty and territory by targeting the origin of American enemy missile launches in the shipping ports, docks, and military shelters of the U.S. hidden in some cities of the UAE," a spokesperson for Iran's Revolutionary Guards said.
In a statement, the IRGC urged residents in the UAE to evacuate ports, docks, and U.S. military shelters to avoid civilian casualties.
Nine ballistic missiles and 33 drones were launched from Iran towards the UAE on Saturday, the Ministry of Defence said, making a total of 294 ballistic missiles, 15 cruise missiles and 1,600 drones launched from Iran since the war started.
Behind the scenes, resentment had already been mounting in Gulf Arab capitals at being drawn into a war they neither initiated nor endorsed but are now paying for economically and militarily, regional sources have told Reuters.
IRAN SHOWS NO SIGN OF CAPITULATION AS STRIKES SPREAD
Iran also vowed to increase its usage of upgraded weapons, particularly ballistic missiles and other missiles with greater destructive power, a defence ministry spokesperson was quoted as saying in state media.
Oil exports from Kharg Island were continuing normally despite the U.S. attack, a senior provincial governor was quoted by the IRNA news agency as saying.
Trump told reporters on Friday the U.S. Navy will "soon" start escorting tankers through the Strait of Hormuz, a conduit for 20% of the world's fossil energy supplies.
Iranian Supreme Leader Mojtaba Khamenei, who replaced his slain father, has said the strategic waterway should remain closed as a tool of 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 U.S. in the region, Iranian media reported.
Some oil loading operations have been suspended in the UAE's Fujairah emirate, a major bunkering hub, industry and trade sources said, after a fire broke out there on Saturday.
The fire occurred after debris fell during the interception of a drone, but no injuries were reported, the emirate's media office said.
Iran, which ramped up oil output in the run-up to the February 28 launch of the war by Israel and the U.S., has continued to ship oil at a rate of 1.1 million to 1.5 million barrels per day, TankerTracker.com and Kpler data show.
Much of the oil shipped from Iran via Kharg goes to China, the top global crude importer.
Oil prices have swung sharply on Trump's changing comments about the likely duration of the war, which began 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.
DEATH TOLL MOUNTS
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.
At least 12 medical personnel were killed in an Israeli strike on a healthcare centre in the town of Borj Qalaouiya in southern Lebanon, the Lebanese state news agency reported on Saturday, citing the health ministry.
Reports from Iranian media said at least 12 people were killed and several others wounded in attacks on multiple locations across Iran, including central and southeastern provinces.
In Dubai, the management team of the ICD Brookfield Place, a business centre in the heart of the Dubai International Financial Centre, said in a message to its tenants seen by Reuters that an incident took place, without elaborating further. Earlier, Dubai's media office said debris from a successful interception struck a building in central Dubai, but no fire or injuries were recorded. It did not specify the location.
After two weeks of war, 2,000 people have been killed, mostly 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.
(Reporting by Reuters bureaux; Writing by Steve Gorman, Simon Lewis, Stephen Coates and Matthias Williams; Editing by William Mallard and Jon Boyle)
