Tensions Escalate! Trump and Iran Exchange Threats, World on Edge

US President Donald Trump and the Iranian government have threatened to escalate their war, targeting energy facilities and fuel in the Gulf, which could once again disrupt global energy and financial markets, including the potential for a regional crisis. On Saturday (21/3/2026), Trump threatened to “destroy” Iran’s power plants if Tehran did not fully reopen the Strait of Hormuz within 48 hours. Iran responded the following day, stating that they would target US infrastructure, including energy facilities in the Gulf, if Trump carried out his threat. More than 2,000 people have been killed during the war launched by the US and Israel on 28 February, which has disrupted markets, increased fuel costs, triggered global inflation concerns, and shaken Western alliances. A Time Bomb for Markets “President Trump’s threats have now placed a 48-hour time bomb that causes high uncertainty in the markets. If the ultimatum is not withdrawn, we could see the reopening of global equity markets on Black Monday with a drastic decline and oil prices surging much higher,” said IG market analyst Tony Sycamore, quoted from Reuters on Saturday (21/3/2026). Tehran is likely to target Gulf energy facilities in Saudi Arabia, the United Arab Emirates, and Qatar. “(This) would deepen and prolong the suffering from higher energy prices and drag the conflict into a broader regional crisis,” said Sycamore. Oil prices surged on Friday (20/3/2026) and settled at a near four-year high after Iraq declared force majeure on all oil fields developed by foreign companies. Meanwhile, Israel attacked a major gas field in Iran, and Tehran responded with attacks on its neighbours, Saudi Arabia, Qatar, and Kuwait. Iran’s attacks have effectively closed the Strait of Hormuz, a narrow waterway that carries about one-fifth of global oil and liquefied natural gas supply, causing the worst oil crisis since the 1970s. The near-closure of the strait caused gas prices in Europe to surge by up to 35% last week. “If Iran does not fully open the Strait of Hormuz without threats within 48 hours from now, the United States will attack and destroy various of their power plants, starting with the largest first,” quoting Trump’s social media post on Saturday (21/3/2026). A few hours later, Iran’s representative to the UN maritime body said the strait remains open to all shipping except vessels related to “Iran’s enemies”. Ali Mousavi, Tehran’s representative to the International Maritime Organization, said travel through the narrow waterway is possible by coordinating security and safety arrangements with Tehran. Ship tracking data shows several vessels, such as an Indian-flagged ship and a Pakistani oil tanker, have successfully passed through the strait safely. Pakistan maintains good relations with Iran while keeping close ties with the US and Saudi Arabia. Trump’s idea of targeting Iranian infrastructure is to make the Hormuz blockade “economically and politically unbearable for Tehran, without destroying Iran’s oil fields that would cause long-term global supply damage,” said Sycamore. Iran’s Khatam al-Anbiya military command headquarters said that if the US attacks Iran’s fuel and energy infrastructure, Iran will target all US energy, information technology, and desalination infrastructure in the region. The Islamic Republic’s electricity grid is closely tied to its energy sector. Attacks on major power plants could trigger blackouts, paralysing everything from pumps and refineries to export terminals and military command centres. Iran’s largest power plants include the Damavand facility near Tehran, the Kerman plant in the southeast, and Ramin in Khuzestan province, all of which have far greater generation capacity than Iran’s only nuclear power plant at Bushehr on the southern coast. Iran Expands Risk with Long-Range Missiles Tehran fired long-range missiles for the first time on Saturday, expanding the risk of attacks beyond the Middle East, while Iranian strikes landed near Israel’s secret nuclear reactor about 13 km (8 miles) southeast of Dimona. Iran launched two ballistic missiles with a range of 4,000 km (2,500 miles) at the US-UK military base in Diego Garcia in the Indian Ocean, said Israeli military chief Eyal Zamir. “These missiles are not intended to attack Israel. Their range reaches the capitals of Europe - Berlin, Paris, and Rome are all within direct threat range,” Zamir said in a statement quoted on Sunday (22/3/2026). Israel’s military said they attacked Tehran just hours after the Iranian strike in southern Israel. Trump and his administration have sent mixed messages about US objectives throughout the war, making it difficult for allies to respond. He accused NATO allies of being cowards for their reluctance to help open the Strait of Hormuz. Some allies said they would consider it, but most said they were reluctant to join a war started by Trump without consulting them. Japan may consider deploying its military for mine-sweeping in the area if a ceasefire is reached, said Foreign Minister Toshimitsu Motegi on Sunday. A new Reuters/Ipsos poll conducted last week found that 59% of Americans disapprove of the US military strikes on Iran, with 37% approving. The war has become a major political burden for Trump ahead of the midterm elections.