Middle East crisis: Iran bombs tanker in Dubai despite Trumps "obliteration" threats

Iran struck a fully loaded crude oil tanker near Dubai early Tuesday, setting it ablaze. This came right after President Donald Trump threatened to completely destroy Iran's energy facilities and oil wells if it doesn't keep the Strait of Hormuz open.

This attack on the Kuwait-flagged Al-Salmi is the latest in a series targeting merchant ships using missiles or explosive drones in the Gulf and Strait of Hormuz. These incidents have escalated since the U.S. and Israel carried out strikes against Iran on February 28.

The ongoing month-long conflict has now spread across the Middle East, resulting in thousands of deaths, disrupting energy supplies, and raising concerns about a potential global economic downturn.

Crude oil prices saw another quick jump following the tanker attack. The vessel has a capacity of around 2 million barrels of oil, worth over $200 million at today's market rates.

Kuwait Petroleum Corp, the ship's owner, confirmed the attack happened early Tuesday, causing a fire and damage to the hull. Authorities in Dubai later reported that they had successfully put out the fire after a drone hit the tanker. There was no oil spill and none of the crew members were injured.

READ ALSO: Trump threatens massive bombing of Iran if Strait of Hormuz is not reopened soon

Soaring oil and fuel costs are starting to pinch the finances of U.S. families and have become a political challenge for President Trump and the Republican Party ahead of the November midterm elections. They had promised to bring down energy prices and boost the country's oil and gas output.

According to data from the GasBuddy price-tracking service, the national average retail price for a gallon of gasoline hit $4 on Monday for the first time in more than three years. Shrinking global supplies have also sent the benchmark Brent crude oil price up by a record 56% this month, pushing it above $113 per barrel.

The fighting on both sides doesn't seem to be letting up, and worries are mounting that this could spread into a larger regional conflict. Iran-backed Houthi rebels have joined the fray by firing missiles and drones at Israel. Meanwhile, Turkey reported that a ballistic missile launched from Iran crossed into Turkish airspace before being intercepted and shot down by NATO's air and missile defenses.

Israel has been carrying out its own missile strikes, targeting what it describes as military infrastructure in Tehran, as well as facilities used by Iran-supported Hezbollah in Beirut, the Lebanese capital.

Just minutes after Israel issued a warning about impending strikes on Tehran, explosions were heard in parts of eastern and western Tehran, according to Iran's Tasnim news agency, which reported the news on Tuesday. Residents in the eastern Pirouzi district said they experienced power outages following the blasts, and officials from Iran's Energy Ministry were working to get the electricity back on, Tasnim added.

In a separate incident on Tuesday in the northwestern Iranian city of Zanjan, a strike hit a Shi'ite congregation hall, killing three people and injuring twelve, a provincial official told Iranian media.

The Israeli military announced early Tuesday that four soldiers had been killed in southern Lebanon, the same region where three United Nations peacekeepers from Indonesia were killed in two different incidents.

READ ALSO: From the UK to Egypt, Slovenia, and Australia: The radical measures nations are taking as oil prices surge

Iran's military spokesman said on state television that targets in its latest missile and drone attacks included "hideouts" of U.S. military personnel in five bases in the region and in Israel.

Thousands of soldiers from the U.S. Army's elite 82nd Airborne Division have started arriving in the Middle East, two U.S. officials told Reuters on Monday, part of reinforcements that would expand Trump's options to include a ground assault in Iran, even as he pursues talks with Tehran.

White House press secretary Karoline Leavitt said Trump wanted to reach a deal with Iranian leaders before a second deadline, now April 6, for Iran to ​open the Strait of Hormuz, a narrow waterway that ​normally carries about a fifth of global oil ⁠and liquefied natural gas supplies.

Leavitt said talks with Iran were progressing, and that what Tehran says publicly differs from what it tells U.S. officials in private.

Iran says it has received U.S. peace proposals via intermediaries, following weekend talks between the foreign ministers of Pakistan, Egypt, Saudi Arabia, and Turkey.

Iranian Foreign Ministry spokesperson Esmaeil Baghaei said the ​proposals were "unrealistic, illogical, and excessive".

After Baghaei's remarks, Trump said the U.S. was in talks with a "more reasonable regime" to ​end the war in Iran, but ⁠issued a new warning over the Strait of Hormuz.

He said the U.S. would obliterate power plants, oil wells and Kharg Island, from where Iran exports much of its oil, i a deal is not reached soon and the strait is not opened.

However, according to a Wall Street Journal report, Trump apparently told his aides he'd be willing to wrap up the military operation even if the strait stays mostly blocked, leaving the tricky task of reopening it for later. That news seemed to ease concerns in the markets, causing oil prices to dip and helping stock markets recover from their earlier lows, as investors grew hopeful about a faster end to the hostilities.

When asked about the report, the White House pointed to remarks from Secretary of State Marco Rubio. He told Al Jazeera that the strait would eventually be open "one way or another" after the U.S. military action.

The White House also mentioned that Trump is considering asking Arab nations to foot the bill for the war costs.

His administration has asked for an extra $200 billion to fund the war effort. This request is facing significant pushback in the U.S. Congress, which has the final say on approving any new spending.