Oil prices rise after Kuwait says Iran attacked water desalination and power plant

Oil prices rose Friday after Kuwait said Iran attacked a power and water desalination plant as fighting escalated in the Persian Gulf.

Brent crude futures, the international benchmark, advanced about 2% to trade at $86.03 per barrel. Meanwhile, U.S. West Texas Intermediate futures gained 2.6% to trade at $80.99.

Kuwait's Ministry of Electricity, Water and Renewable Energy said the attack damaged the facility, sparking a fire that affected a large number of its electricity generating units, according to The Kuwait Times.

Kuwait is heavily dependent on desalination plants for drinking water. Analysts have long feared that Iran would strike infrastructure that is critical to supporting civilian life in the Middle East.

Iran said it attacked U.S. targets in Bahrain, Jordan, Kuwait, Oman, Qatar and Syria in retaliation for the latest round of strikes by Washington, according to state news outlet PressTV.

A tanker was hit by a projectile off the coast of Oman causing minor damage, the United Kingdom Maritime Trade Operations Center said in an incident report Friday. Iran has repeatedly attacked tankers over the past week as it tries to force civilian ships to transit the Strait of Hormuz through its waters.

U.S. Central Command said overnight that it had completed its sixth consecutive night of strikes against Iran, hitting dozens of military targets such as military logistics infrastructure and maritime capabilities.

Centcom said more than 50,000 service members were operating across the Middle East, adding that they "remain vigilant, lethal, and ready."

The escalating fighting comes as the fragile truce reached last month has collapsed, once again disrupting energy flows through the strategically vital Strait of Hormuz, which typically handles around 20% of the world's oil traffic.

Brent crude futures and West Texas Intermediate futures over the last six months.

In an interview with Fox News on Tuesday, President Donald Trump said U.S. forces would target Iran's infrastructure next week unless the two sides reached a diplomatic breakthrough.

Iran's top military command warned that if Trump's threats were carried out, "everything that is still intact … that is, all the infrastructure in the region – will be crushed," a spokesperson said in a statement on Telegram Thursday.

Iran has asked Yemen's Houthis to close the Red Sea oil route if the U.S. targets Iranian power infrastructure, three unnamed sources told Reuters Thursday.

Rystad Energy still sees a limited agreement between Washington and Tehran as the most likely outcome though confidence in this assessment has weakened, said Jorge León, Rystad's head of geopolitical analysis.

Iran and the U.S. still have strong economic incentives to avoid a complete breakdown in talks, with the U.S. seeking lower oil prices ahead of the November midterm elections and Iran reluctant to forgo economic incentives, León said in a note Thursday.

"Tehran has a substantial economic package on the table, including access to frozen assets and export waivers, that it does not want to walk away from permanently," León said.