From Dubai: The war between the US, Israel and Iran entered a new phase on Saturday when Israeli warplanes struck oil storage and refining facilities in Tehran for the first time. The escalation marks a deliberate shift toward targeting civil infrastructure critical to Iran's economy and military operations, raising the stakes for a conflict already reshaping global energy markets.
The strikes hit four oil storage facilities and an oil production transfer centre in Tehran and Alborz province, targeting the Aghdasieh oil warehouse in northeast Tehran, the Tehran refinery in the south, the Shahran oil depot in the west, and an oil depot in Karaj city.At least four tanker drivers were killed in the attacks.
The distinction matters. For the first eight days of conflict,the strikes had avoided civil industrial facilities, targeting instead military installations, nuclear and missile production sites, and government buildings. By breaching that threshold on Saturday night, Israel and its US partner have signalled they intend to degrade Iran's capacity to sustain both military operations and economic function. This is a strategy aimed not merely at defence but at degradation.
Israeli officials framed the operation narrowly.Israel said it struck fuel storage facilities that were used to operate military infrastructure. Yet observers in the region read the strikes differently.Al Jazeera reporting from Tehran described the attacks on oil facilities as part of a psychological war against Iranians to frighten them and limit the mobility of Iranian troops.
For Australia's energy sector, this signals genuine complexity.Global oil prices have skyrocketed as vessel traffic came to a near-halt in the Strait of Hormuz.US crude recorded its biggest weekly gain in futures trading history, soaring 35.63 per cent, while Brent crude jumped about 28 per cent for its biggest weekly gain since April 2020. Australia imports roughly one-third of its oil, predominantly from the Middle East, and any sustained disruption to the Strait would flow directly to domestic fuel prices at the bowser.
The broader picture is worth understanding.The war, which erupted on February 28 after joint US-Israeli strikes hit Iran, has so far killed at least 1,230 people in the Islamic Republic, more than 300 in Lebanon and around a dozen in Israel, according to officials.Despite the attack, Iran states there is no shortage of fuel distribution.
The regional dynamics at play are more complex than the headlines suggest.Iran has hit a desalination plant in Bahrain, while the US has damaged a desalination plant on Qeshm Island in Iran, drawing critical water infrastructure into the conflict. This represents a dangerous precedent that could invite further tit-for-tat attacks on civilian systems across the Gulf.
Saudi Arabia has told Iranian officials that while it favours a diplomatic settlement to Iran's conflict with the US, continued attacks on the kingdom and its energy sector could push Riyadh to respond in kind. This messaging suggests even US-aligned Gulf states are feeling the pressure of escalation and signalling their own limits.
For Australia, the immediate concern is not political but practical. Sustained disruption to Hormuz shipping will force Asian markets to seek alternative suppliers and higher prices. The second concern is stability. An Iranian regime already weakened by internal protest now faces both military pressure and economic strain. Unclear succession arrangements following the death of Supreme Leader Ayatollah Ali Khamenei compound the risk that miscalculation could trigger further escalation.
Reasonable observers can support Israel's right to defend itself while still recognising that expanding the conflict to civil infrastructure closes off paths to negotiated settlement.The White House has said the campaign may last four to six weeks. That duration alone would impose measurable costs on Australian households through fuel and inflation.
The evidence suggests the conflict is now in a different phase: from military strikes aimed at degrading Iranian offensive capacity to economic strikes aimed at imposing costs on Iran's ability to sustain itself. That shift has implications well beyond Tehran. Every strike that damages oil infrastructure raises the price Australians pay at the pump and narrows the window for diplomacy. Sound policy requires acknowledging both the legitimate security concerns driving these attacks and the real economic consequences they impose on allies halfway around the world.