Red Sea crisis sends Saudi tankers back

Two oil tankers carrying Saudi crude to Asia reversed course in the Red Sea on Tuesday after threats from Yemen's Iran-aligned Houthis, as a widening Middle East conflict disrupted shipping through two of the world's most critical energy chokepoints.

The diversions came as U.S. forces bombed targets in the south and west of Iran overnight, Tehran targeted U.S. sites in Bahrain, Kuwait and Jordan and at least one tanker was hit in the Strait of Hormuz in the latest escalation of violence that has all but wrecked an interim peace deal signed last month.

The Houthis announced a naval blockade on Saudi Arabia on Monday, opening a potential new front in the war and raising the threat to global energy supplies and trade beyond the Gulf.

The two tankers, which loaded Saudi crude bound for China and India this week, made U-turns and were headed toward the Suez, shipping data on LSEG showed. However, sources said Saudi Arabia's Red Sea port of Yanbu was operating normally.

Oil prices gained around 2% on the latest attacks, but signs that Tehran and Washington want to resume diplomacy helped to limit price rises.

U.S. Central Command said it had hit Iranian military command centers, maritime capabilities, missile and drone launch sites, and air defence systems in its latest round of strikes.

Explosions were heard around the city of Shiraz in southern Iran, state media said. Konarak and Chabahar on the southern coast, the city of Khorramabad and a civilian site outside the city of Abdanan, both in the west, all came under attack, media reports said. Later the IRNA news agency quoted an official in Khorramabad as saying no enemy attack had taken place there.

Fifty civilians have been killed and 500 wounded in the recent U.S. strikes on Iran, a health ministry official said.

IRAN STRIKES ACROSS THE REGION

Iran launched renewed attacks across the Gulf, where recent strikes on desalination facilities have raised concerns about water shortages.

Kuwait said it was responding to a drone and missile attack on Tuesday afternoon and sirens sounded in Bahrain.

Attacks on Kuwaiti power generation and water desalination plants on Monday forced several generation units out of service as a precaution and repairs were underway, authorities said.

Iran's Revolutionary Guards said they targeted infrastructure in Bahrain belonging to U.S. tech company Amazon in response to what they described as a U.S. strike on the construction site of Iran's planned Darkhovin nuclear power plant.

Iranian state media reported that Iranian forces also targeted accommodation facilities of U.S. military personnel at Bahrain's Sheikh Isa Air Base. There was no immediate comment from the U.S. military, Bahrain or Amazon on the reported incidents, which Reuters was unable to verify.

The Iranian army said it launched drone attacks against three U.S. military bases in Kuwait on Tuesday. The Guards said they attacked a U.S. military site in Jordan, while Jordan said its forces intercepted and destroyed five Iranian drones.

TANKERS STRUCK

The maritime security agency UKMTO said on Tuesday a tanker in the Strait of Hormuz reported being struck by a projectile, forcing its crew to abandon the vessel and board a lifeboat.

Iran's Revolutionary Guards also said two oil tankers caught fire after explosions while attempting to transit the southern shipping lane of the strait, through which one-fifth of global oil and liquefied natural gas supplies normally pass.

Just four commodity vessels crossed the strait on Monday, mostly using the northern shipping lane near Iran's coast, down from seven the previous day, Kpler data showed.

Iran had been pressing the Houthis to close the Bab el-Mandeb gateway to the Red Sea if the U.S. continued to attack Iranian power infrastructure — putting two of the world's most vital energy arteries at risk.

A full closure of Bab el-Mandeb could reduce global oil supply by 7% as it would leave most Saudi oil exports unable to leave the region, adding to the 10% cut in oil flows from the war in the Gulf.

DIPLOMATIC PUSH TO RESTORE CEASEFIRE

A senior Iranian official told Reuters on Monday that Tehran had received a proposal from mediators for a 10-day ceasefire in efforts to salvage the interim deal, intended to pave the way to a lasting deal to end the war that began on February 28 with U.S.-Israeli attacks on Iran.

Israel has not joined the latest round of strikes on Iran. "We have no desire to insert ourselves into this, but we are prepared for any scenario," Israeli Finance Minister Bezalel Smotrich said on Tuesday.

Iranian Interior Minister Eskandar Momeni had asked Pakistan to resume its mediation role in the conflict and later arrived in Islamabad for further talks.

The latest phase of fighting has proved to be among the deadliest of the conflict for U.S. forces. U.S. troop deaths rose to 17 over the weekend.

Trump, under mounting pressure at home over rising gasoline prices since the war began, said the latest U.S. strikes on Iran were avenging the deaths of American service members.

The war has killed thousands of people, mostly in Iran and Lebanon. Parts of Lebanon remain under Israeli occupation following attacks on Israel by Hezbollah fighters, who said they were acting in solidarity with Tehran.