Iran Weighs Strikes on Gulf Oil Bypass Routes to Pressure U.S. Fuel Prices Before Midterms, Official Says

Iran is considering attacks on oil export facilities in the Gulf that bypass the Strait of Hormuz in a bid to push up global crude prices and U.S. gasoline costs, according to a report. The aim is to erode support for President Donald Trump's party ahead of the November midterm elections.

Odaily, a cryptocurrency-focused media outlet, reported on August 21 that a senior Iranian official said Tehran was planning an "economic war" that includes such measures.

Potential targets include Saudi Arabia's Yanbu pipeline and the United Arab Emirates' Fujairah oil terminal, two key routes used to bypass the Strait of Hormuz. Together, the facilities handle about 5.5 million barrels a day.

If Iran were to disrupt those routes as well as the roughly 5 million barrels a day now transported through the Strait of Hormuz, the Gulf region's oil export capacity could be severely curtailed. Some crude exports are still being maintained through those alternative routes despite the closure of the strait.

The official said the plan is designed to widen supply disruptions, drive up U.S. gasoline prices and increase political pressure on Trump ahead of the November elections.

With Brent crude nearing $93 a barrel, any concrete move against Yanbu or Fujairah would likely be seen by the market as a much bigger shock than the current supply disruption, the report said.