Despite recent signals from Donald Trump suggesting an imminent end to hostilities, tensions in the Middle East continue to escalate. According to reports, on March 10, the Iranian military issued a statement announcing that, in retaliation for an attack on an Iranian oil depot, its air force used combat drones to strike oil and gas refineries and fuel storage facilities located in Haifa, Israel. Earlier the same day, the Israeli Defense Forces reported detecting a new wave of missile attacks from Iran, triggering air raid sirens in Tel Aviv. Prior to this, Israeli authorities stated that airstrikes carried out by its military in the early hours of March 10 targeted facilities including nuclear research laboratories in Tehran. Following news of the mutual attacks on energy infrastructure, oil prices experienced a short-term rebound, narrowing their daily losses. At the time of writing, WTI crude had pared losses to around 7.5%, trading near $91 per barrel.

Ceasefire signals have emerged, and markets are awaiting tangible restoration of strait operations. Previously, Donald Trump hinted that the conflict with Iran would soon conclude. On March 9, the U.S. President stated during a press conference in Miami, Florida, that hostilities with Iran would end “soon,” though not within the current week. While this remark initially led to a decline in oil prices, it did not prevent further escalation of the conflict. As the Strait of Hormuz remains obstructed, several oil-producing nations have been forced to cut output. Reports indicate that Saudi Arabia, the UAE, Iraq, and Kuwait have collectively reduced production by as much as 6.7 million barrels per day. Saudi Arabia has cut output by 2 to 2.5 million barrels per day, Iraq by approximately 2.9 million barrels, while Kuwait and the UAE have each reduced production by about 500,000 to 800,000 barrels per day. Markets are closely monitoring prospects for the restoration of shipping through the Strait of Hormuz.

Conflict triggers “black rain” disaster; WHO urgently calls for de-escalation. Secondary disasters resulting from the fighting are becoming evident. Following Israeli airstrikes on multiple oil storage facilities in Tehran, fires and thick black smoke blanketed the area, and harmful “black rain,” containing petroleum components, fell locally. On March 9, World Health Organization Director-General Tedros Adhanom Ghebreyesus warned on social media platform X that damage to oil infrastructure has contaminated food, water, and air, posing a serious public health threat to children, the elderly, and those with underlying medical conditions. He urged all parties to immediately de-escalate tensions to prevent the conflict from endangering public health and overwhelming healthcare systems.