US President Donald Trump threatened to strike the oil infrastructure of Iran's Kharg Island hub unless Tehran stopped attacking vessels in the Strait of Hormuz, a warning that could further roil markets coping with a historic supply disruption.
Trump paired his Friday ultimatum with a social media post saying the US had "totally obliterated" military targets on the island, the export terminal for 90 per cent of Iran's oil shipments, which lies about 300 miles (500 kilometres) northwest of the strait.
US strikes did not target Kharg's oil infrastructure, but, "should Iran, or anyone else, do anything to interfere with the Free and Safe Passage of Ships through the Strait of Hormuz, I will immediately reconsider this decision," Trump wrote.
Iran could not defend against US attacks, the president said. "Iran’s Military, and all others involved with this Terrorist Regime, would be wise to lay down their arms, and save what’s left of their country, which isn’t much!" he posted on social media.
Trump told reporters on Friday the US Navy will "soon" start escorting tankers through the Strait of Hormuz, a conduit for 20 per cent of the world's fossil energy supplies.
As the war entered its third week, Iran, however, has shown no sign of capitulating or bowing to US-Israeli military pressure. Iranian Supreme Leader Mojtaba Khamenei, who replaced his slain father, has said the strategic waterway should remain closed as a tool of pressure.
Iran's armed forces responded to the Kharg attack by saying any strike on their country's oil and energy infrastructure would lead to strikes on facilities owned by oil companies cooperating with the United States in the region, Iranian media reported.
Iran's semi-official Fars news agency reported, citing sources, that more than 15 explosions were heard on the island during the US attacks. The sources said air defenses, a naval base and airport facilities were hit, but there was no damage to oil infrastructure.
Iran, which ramped up oil output in the run-up to the February 28 launch of the war by Israel and the US, has continued to ship oil at a rate of 1.1 million to 1.5 million barrels per day, TankerTracker.com and Kpler data show.
Much of the oil shipped from Iran via Kharg goes to China, the top global crude importer.
Markets were watching for any sign that US strikes had damaged the island's intricate network of pipelines, terminals and storage tanks. Even minor disruptions could further tighten global supply, adding pressure to a volatile market.
Iran also claimed success in shooting down five drones over its airspace, bringing to 114 the total US and Israeli drones it has downed during the war, Iranian state TV claimed on Saturday.
Oil prices have swung sharply on Trump's changing comments about the likely duration of the war, which began with massive US and Israeli bombardments of Iran and quickly spread into a regional conflict with broad consequences for worldwide energy and stock markets.
The US embassy in the Iraqi capital Baghdad was hit in a missile attack on Saturday, causing smoke to rise from the building, Iraqi security sources said. They did not have further details on the strike.
In other attacks across the region, Iran's Revolutionary Guards said they had carried out additional attacks on Israel with Lebanon's Hezbollah militia, Iran's Tasnim news agency reported.
Some oil loading operations in the port of UAE's Fujairah, outside the Strait of Hormuz, have been suspended after a drone attack and fire on Saturday morning.
At least 12 medical personnel were killed in an Israeli strike on a healthcare centre in the town of Borj Qalaouiya in southern Lebanon, the Lebanese state news agency reported on Saturday, citing the health ministry.
(Reporting by Reuters bureaux; Writing by Steve Gorman, Simon Lewis, Stephen Coates and Matthias Williams; Editing by William Mallard and Jon Boyle)