Iran claims to have struck British oil tankers with missiles leaving them ‘burning’ as the regime continues to seek revenge for the death of Supreme Leader Ayatollah Ali Khamenei.

Iran’s Revolutionary Guards (IRGC) said they hit three British and American ships in the Persian Gulf and Strait of Hormuz on Sunday – as footage showed a tanker dramatically bursting into flames.

The IRGC said: ‘In continuation of attacks on hostile enemy maritime targets, three violating tankers from the United States and Britain in the Persian Gulf and Strait of Hormuz were hit by missiles and are burning’.

The UK and the US are yet to confirm the attacks.  

Iran has told ships not to pass through the Strait of Hormuz, which carries around 20 per cent of the world’s oil and gas, although a number of Iranian and Chinese vessels have continued to pass through it today. 

The halting of shipping in the strait has seen markets brace for a surge in global oil prices. 

Motorists in the UK were warned of potential ‘record prices at the pumps’ while economists predicted fragile economies could be pushed ‘closer to recession in a matter of weeks’. 

The threat of Iranian reprisal attacks saw at least 150 tankers drop anchor as shipping companies refused to sail through the 100-mile passage which is just 24 miles wide.

One tanker was left burning in the sea and its crew had to be evacuated after a suspected strike by the Iranian Revolutionary Guard, and a second was reportedly ‘hit by a projectile’ off the coast of Oman causing an engine room explosion which killed a crew member.

Meanwhile, there were attacks on naval bases used by the US and a port in Dubai as part of reprisals for the American-Israeli operation which saw Ayatollah Ali Khamenei killed yesterday.

The American military warned it could not guarantee the safety of ships travelling through the Strait, where the Persian Gulf flows into the Arabian Sea.

Some 20 per cent of the world’s oil and 25 per cent of liquefied natural gas flows through the ‘vital’ passage, which Iran briefly closed off by holding live fire drills last month.

Although the sea route has not been officially blockaded by Iran, experts predict shipping may not resume for several days – threatening to send oil prices soaring.

As a result, petrol prices could soar on a scale not seen since Russia’s invasion of Ukraine four years ago.

Edmund King, president of the AA, warned the impact on fuel prices could be worse than when Russia invaded Ukraine in 2022, when petrol surged as high as 190p per litre. It has fallen to an around 133p.

Mr King told The Times the ‘turmoil and bombing’ in the Middle East ‘will inevitably lead to price hikes.

He said: ‘Drivers beware, within the next 10 to 12 days we could be seeing record prices at the pumps.’

Ali Vaez, director of the Iran project at the International Crisis Group, said yesterday: ‘Closure of the Strait of Hormuz would disrupt roughly a fifth of globally traded oil overnight – and prices wouldn’t just spike, they would gap violently upward on fear alone.

‘The shock would reverberate far beyond energy markets, tightening financial conditions, fuelling inflation, and pushing fragile economies closer to recession in a matter of weeks.’

Oil markets are due to open at 1am tomorrow morning after the price of Brent crude oil had already risen to US$73 (£54) on Friday, its highest level since last July.

Trading was closed over the weekend but there were reports of over-the-counter trading between private buyers at $80 (£59) per barrel.

Susannah Streeter, Chief investment Strategist at Wealth Club, said the halting of supplies on the ‘vital’ Strait could cause a ‘shock’ for financial markets ‘just as inflation appeared to be coming under control in countries like the US and the UK’.

She said: ‘Financial markets are set for another shock of volatility following fresh strikes in Iran.

‘Oil prices had already been creeping up as nerves became more frayed and they are set to shoot sharply higher given the risks of disruption to global oil supplies.’

Michael Brown, of market analysts Pepperstone, said the price of crude oil was set to rise ‘significantly higher’ – at least temporarily.

But he added: ‘It’s important to remember that geopolitical events tend not to be a trigger for durable or longer-lasting market moves in any asset.’

Kallum Pickering, chief economist at Peel Hunt, said there was ‘a risk’ the disruption to oil supplies could trigger the biggest price hikes since 2022 – ‘when you just didn’t have as much oil and gas as the day before and companies start outbidding each other’.

But he added: ‘We’re not there yet’.

He said the impact depends on how long shipping is affected with markets braced for ‘many weeks of uncertainty’.

Mr Pickering said price hikes could be mitigated by rises in oil and gas production elsewhere, also given the US and Israel ‘may avoid targeting Iran’s oil production’ due to ‘their emphasis on securing the interests of the Iranian people’.

The threat to oil and liquid natural gas tankers became apparent yesterday, after a VHF radio transmission from the Iranian Revolutionary Guard.

Major companies which suspended shipping include European giants MAERSK and CAM CGM, concerned about the threat of attacks from rockets, drones and mines.

This morning, at least 150 tankers including crude and liquefied natural gas vessels dropped anchor in open Gulf waters beyond the Strait of Hormuz and dozens more were stationary on the other side of the chokepoint, shipping data showed.

The tankers were clustered in open waters off the coasts of major Gulf oil producers including Iraq and Saudi Arabia as well as LNG giant Qatar, according to Reuters estimates based on ship-tracking data from the MarineTraffic platform.

Officials in Oman said the oil tanker which caught fire was attacked this morning injuring four mariners on board.

The Indian and Iranian crew of the Palau-flagged vessel, Skylight, had to be evacuated.

Separately, Al Jazeera reported that a Marshall Islands-flagged tanker, MKD VYOM, was reportedly struck by projectile off coast of Oman.

The tanker’s hull breached but no signs of pollution.

The ship’s manager, V Ships Asia, confirmed a crew member was killed in an engine room explosion and said the vessel was sailing to safe location for further inspection.

A crew member aboard one of the tankers attacked by Iran was killed in an engine room explosion, the ship’s management confirmed.

Iran’s Revolutionary Guards said it had ‘hit 3 U.S and UK (linked) oil tankers with missiles’ in the Gulf and Strait of Hormuz.

Video taken aboard another vessel anchored just of the UAE coast yesterday showed a rocket landing in the water 200m away.

Ports in Dubai, Oman and Bahrain have suspended operations after aerial attacks.

Iran struck the port of Duqm, Oman, which has been used by the US Navy as a logistical hub and is capable of hosting aircraft carriers.

Yesterday, Dubai’s Jebel Ali Port was ‘hit by debris from an aerial interception’ causing at least one fire.

And today, three rockets were reportedly fired – two of which were intercepted – at naval base in Abu Dhabi.

OPEC+, which includes key oil producers Saudi Arabia and Russia, today announced a greater-than-expected increase to the cartel’s oil production quotas, of 206 thousand barrels per day’.

The cartel said the move would happen in April. It did not mention the Iran conflict but cited ‘a steady global economic outlook and current healthy market fundamentals’. 

The remnants of the Iranian regime are launching widespread airstrikes targeting US allies, military bases and areas popular with Western expats – and three American troops have been confirmed dead.

Iran vowed to unleash its ‘most intense offensive operation in history’, with ‘force’ its enemies ‘have never experienced before’.

Three civilians have been killed in Dubai as Iran’s missile and suicide drone bombardment of the Middle East continues.

At least two drones hit Dubai’s airport, the world-famous Burj Al Arab and Palm Jumeirah hotels were hit yesterday, and further explosions echoed across the Emirates today.

Two further rounds of blasts echoed around Dubai this morning, with the most recent reported just before 12pm GMT.

In Manama, the capital of Bahrain, the Crowne Plaza hotel was damaged by a suicide drone, and Iranian missiles have also been hitting Tel Aviv – with at least ten people confirmed to have been killed in Israel. There has also been a death in Kuwait. 

Senior regime figure Ali Larijani, who is expected to take over from the assassinated Ayatollah, led the calls to intensify revenge attacks on Israel and the West today.

The revenge strikes follow confirmation from Iran that Supreme Leader Ayatollah Ali Khamenei was killed by the joint US-Israeli strikes, along with four of his family members and at least two high-level military leaders.

In the last few hours, residents of Riyadh, Saudi Arabia’s capital, also reported hearing several loud bangs.

Explosions have been heard for a second day across the Middle East though most missiles and drones have been downed by air defences.

Iran claimed to have struck 27 US bases in the region, but has also hit a range of other sites including residential tower blocks and luxury hotels.

The UAE’s Ministry of Defence said that, as of this afternoon, it had shot down 152 ballistic missiles, two cruise missiles, and 506 drones. A handful of attacks have successfully breached defences and hit their mark.

Dramatic footage showed a fireball in the sky near the Burj Khalifa, the world’s tallest building, as a weapon was intercepted.

Iran also launched two missiles towards British military bases in Cyprus, Defence Secretary John Healey said this morning. However, the Cypriot government later denied that any missies had been heading towards it.

Mr Healey warned that Iranian missile commanders are ‘increasingly allowed to choose their own targets’ as Tehran loses its ‘command and control’.

This afternoon, Iran targeted one of America’s two aircraft carriers that have been dispatched to the region, the USS Abraham Lincoln.

State media declared it had been ‘struck by four ballistic missiles’. USS Central Command denied this, however, insisting the missiles ‘didn’t even come close’.

The Crowne Plaza hotel in Bahrain was engulfed in thick smoke this morning, with its owners reporting it had suffered an ‘incident’ but that all guests and staff were safe.

Bahrain’s air defences responded overnight to ‘hostile Iranian missile attacks’, intercepting at least 45 missiles and nine drones, state media reported this morning.

Separately, the US military said that three service people have been killed in action, and a further five seriously injured, as part of Operation Epic Fury – as it has coined the campaign.

An oil tanker was attacked off the coast of Musandam in Oman, according to the country’s maritime security center, injuring four people and forcing the entire 20-strong crew to evacuate.

At least ten people have been killed in Israel by the Iranian strikes. Nine people were killed in a missile strike on the northern town of Beit Shemesh, the Israeli ambulance service said today.