Iran threatens Persian Gulf exclusion zone as Hormuz shipping slows

Yemen’s Iran-aligned Houthis attacked energy facilities in Saudi Arabia, and Saudi authorities said operations at some facilities had been halted following the strikes, which wounded more than 70 people. The Financial Times reported that oil facilities operated by Saudi Aramco in the Saudi Arabian city of Jizan — where one of the country’s largest refineries is based — had been attacked.

Brent crude has risen back over the $98 a barrel mark this week, its highest level since 24 July, according to the Guardian. The attacks add to the pressure on oil and gas production in the region, which remains disrupted by the ongoing Iran war, and the global economy faces the prospect of $100-a-barrel oil again.

Mohsen Rezaei, the secretary of Iran’s Supreme National Security Council, posted on X that Iran had “fundamentally recalibrated” its posture toward U.S. forces. Rezaei wrote: “In recent days, Washington has received a clear warning from Iran’s new missiles. Economic warfare will be met by a maritime exclusion zone across the Persian Gulf to the blockade perimeter. The operational posture toward U.S. warships and bases has been fundamentally recalibrated.”

The Guardian noted that such a zone would presumably further undermine U.S. efforts to reopen the strait.

Shipping traffic through the Strait of Hormuz has already slowed this week. Just seven commodity vessels sailed through the strait on Monday, down from eight on Sunday, according to data cited by the Guardian. Before the war began, about 130 ships a day would cross the strait.

High oil prices feed inflationary pressure through the broader economy, a backdrop to the Bank of England’s recent decision to hold the Bank Rate at 3.75%. Later today, MPs in London will question Bank of England governor Andrew Bailey and colleagues about that decision.

MPs are likely to question witnesses on the potential inflationary impact of the war in Iran and on how the Monetary Policy Committee considers recent developments in AI, the Treasury select committee said. Bank of England policymakers are scheduled to appear before the committee at 2.15pm BST.