Iran threatens to retaliate against Gulf energy and water after Trump ultimatum

Highlights:

• Tehran vows to strike Gulf infrastructure if US attacks Iranian power grid
• Threats add to worries in global markets
• Tehran says strait open to all but 'enemies'

Iran warned it would strike energy and water infrastructure across the Gulf if US President Donald Trump follows through on his threat to attack its electricity grid, raising fears of mass disruption in a region heavily dependent on desalination for drinking water.

Trump set a Monday deadline of around 7:45 pm EDT (2345 GMT), warning late on Saturday that the United States would strike Iran's power plants unless Tehran fully reopened the Strait of Hormuz within 48 hours.

The prospect of tit-for-tat strikes on civilian infrastructure further unsettled oil markets, with prices opening choppy in early Asia trading.

After more than three weeks of heavy US and Israeli bombardment that officials say has sharply reduced Iran's missile capabilities, Tehran has continued to demonstrate its ability to strike back. Air raid sirens sounded across parts of northern and central Israel, including in Tel Aviv, and the occupied West Bank overnight on Sunday, warning of incoming missiles from Iran.

Hours earlier, the Israeli military said it had completed a wave of strikes on Tehran that targeted a military base as well as weapons production and storage facilities.

At least one person was killed in an air strike on a radio station in Iran's Gulf port of Bandar Abbas and air defences were activated in eastern Tehran, the semi-official Mehr News agency reported early on Monday.

Trump's warning came less than a day after signalling the United States might consider winding down the conflict, even as US Marines and heavy landing craft were heading to the region.

"If Iran's fuel and energy infrastructure is attacked by the enemy, all energy infrastructure, as well as information technology...and water desalination facilities, belonging to the US and the regime in the region will be targeted pursuant to previous warnings," Iranian military spokesman Ebrahim Zolfaqari said, according to state media.

But 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, in part by powering the desalination plants that produce 100% of the water consumed in Bahrain and Qatar. Such plants use seawater to meet more than 80% of drinking water needs in the United Arab Emirates, and 50% of the water supply in Saudi Arabia.

Iran's Parliament Speaker Mohammad Baqer Qalibaf doubled down, writing on X that critical infrastructure and energy facilities in the Middle East 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 US and Israel launched on 28 February, 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.

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 pm 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.

The 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 US-British Indian Ocean military base, expanding the risk of attacks beyond the Middle East.

On Sunday, Iranian strikes on two southern Israeli towns injured dozens in what an Israeli hospital described as a major casualty event. The towns were located close to Israel's secretive nuclear reactor and a number of military installations, including Nevatim Air Base, one of the country's largest.

Israel expects 'weeks more of fighting'

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.

Israeli military spokesperson Brigadier General Effie Defrin told reporters Israel continues to hit Iran nonstop and expects "weeks more of fighting against Iran and Hezbollah."

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. Israel later said it was checking whether the death was caused by Israeli fire.

Hezbollah has fired hundreds of rockets at Israel since it entered the regional war on 2 March, 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".