Tensions Escalate: Iran Threatens Retaliation Against Gulf Neighbors Over US Energy Strike Warning

Iran said on Sunday it would strike the energy and water systems of its Gulf neighbours in retaliation if U.S. President Donald Trump follows through with a threat to hit Iran's electricity grid in 48 hours, escalating the three-week-old war.The prospect of tit-for-tat strikes on civilian infrastructure could deepen the regional crisis and rattle global markets when they reopen on Monday morning.Air raid sirens sounded across Israel from the early hours of Sunday, warning of incoming missiles from Iran, after scores of people were hurt overnight in two separate attacks in the southern Israeli towns of Arad and Dimona.The Israeli military said hours later that it was striking Tehran in response.Trump threatened overnight to "obliterate" Iran's power plants if Tehran did not fully reopen the Strait of Hormuz within 48 hours, barely a day after he talked about "winding down" the war. He made the new threat as U.S. Marines and heavy landing craft are heading to the region.Also ReadIran threatens Hormuz shutdown over Trump's energy strike warningFPI flows into FAR securities turn negative amid global risks, oil surgeWest Asia crisis: Hormuz closure forcing Trump, importers to seek solutionTrump set to feature on gold coin to celebrate 250 years of US IndependenceIran strikes near Israeli nuclear hub as Trump sets 48-hr Hormuz deadlineBut while attacks on electricity could hurt Iran, they would be potentially catastrophic for its Gulf neighbours, which consume around five times as much power per capita. Electricity makes their gleaming desert cities habitable, and most of them produce nearly all of their drinking water by purifying it from the sea.Iran's Parliament Speaker Mohammad Baqer Qalibaf wrote on X that critical infrastructure and energy facilities in the West Asia could be "irreversibly destroyed" should Iranian power plants be attacked.Iran's powerful Revolutionary Guards said it would also mean the shipping lane where a fifth of global oil and liquefied natural gas normally transits along Iran's southern coast would remain shut."The Strait of Hormuz will be completely closed and will not be opened until our destroyed power plants are rebuilt," the Guards said in a statement.More than 2,000 people have been killed during the war the U.S. and Israel launched on February 28, which has upended markets, spiked fuel costs, fuelled global inflation fears and convulsed the postwar Western alliance.'Ticking time bomb of elevated uncertainty'"President Trump's threat has now placed a 48-hour ticking time bomb of elevated uncertainty over markets," said IG market analyst Tony Sycamore, who expects stock markets to fall when they reopen on Monday.Oil prices jumped on Friday, ending the day at their highest in nearly four years.Markets already under severe strain from blockaded shipping were further rattled last week when Israel attacked a major gas field in Iran, and Tehran responded with strikes on neighbours Saudi Arabia, Qatar and Kuwait, raising the prospect of damage hindering energy output even if tankers resume sailing.Iranian attacks have effectively closed the Strait of Hormuz, causing the worst oil crisis since the 1970s. Its near-closure sent European gas prices surging as much as 35% last week."If Iran doesn't FULLY OPEN, WITHOUT THREAT, the Strait of Hormuz, within 48 HOURS from this exact point in time, the United States of America will hit and obliterate their various POWER PLANTS, STARTING WITH THE BIGGEST ONE FIRST!" Trump posted on social media around 7:45 p.m. EDT (2345 GMT) on Saturday.Iranian media quoted the country's representative to the International Maritime Organisation as saying the strait remains open to all shipping except vessels linked to "Iran's enemies".Ali Mousavi said passage through the waterway was possible by coordinating security and safety arrangements with Tehran.Ship-tracking data shows some vessels, such as Indian-flagged ships and a Pakistani oil tanker, have negotiated safe passage through the strait. But the vast majority of ships have remained holed up inside.Iran's Khatam al-Anbiya military command headquarters said on Sunday if the U.S. hit Iran's fuel and energy infrastructure, Iran would attack all U.S. energy, information technology and desalination infrastructure in the region.Striking major Iranian power plants could trigger blackouts, crippling everything from pumps and refineries to export terminals and military command centres.Iran expands risks with long-range missilesThe United States and Israel say they have seriously degraded Iran's ability to project force beyond its borders with their three weeks of intensive air strikes.But Tehran fired its first known long-range ballistic missiles with a range of 4,000 km (2,500 miles) on Friday towards a U.S.-British Indian Ocean military base, expanding the risk of attacks beyond the West Asia.An Iranian strike also landed near Israel's secretive nuclear reactor about 13 km (8 miles) southeast of the city of Dimona.The war has been taking place alongside a confrontation on a separate front between Israel and Lebanon's Hezbollah, backed by Iran, with Israel saying on Sunday its troops had raided a number of the armed group's sites in southern Lebanon.Hezbollah said it had attacked several border areas in northern Israel. Israeli emergency services said one person was killed in a kibbutz near the border, the first fatality in Israel killed by fire from Lebanon since the escalation began.Hezbollah has fired hundreds of rockets at Israel since it entered the regional war on March 2, prompting an Israeli offensive that has killed more than 1,000 people in Lebanon.Israel said it had instructed the military to accelerate the demolition of Lebanese homes in "frontline villages" to end threats to Israelis, and to destroy all bridges over Lebanon's Litani River which it said were used for "terrorist activity".Pope Leo appealed for an end to the conflict. "The death and suffering caused by this war are a scandal to the whole human family," he said.A Reuters/Ipsos poll conducted last week found 59% of Americans disapprove of U.S. strikes against Iran, while 37% approved. The war has become a major political liability for Trump ahead of November elections for Congress.