The tanker war transformed the Persian Gulf into a battlefield where merchant shipping became a direct casualty of interstate conflict. For five years, Iraq and Iran attacked each other's oil exports, the US Navy escorted Kuwaiti vessels, and commercial shipping premiums soared as insurers priced in the risk of being hit by an anti-ship missile.

Iraqi Strategy and the Exocet

Iraq's strategy was straightforward: cripple Iran's oil exports, which provided the foreign currency that funded the war effort. Using French-supplied Exocet missiles and later deploying helicopters armed with Exocets, Iraqi aircraft targeted Iranian tankers in the Persian Gulf. The initial attacks began in 1984 and escalated in frequency and intensity.

Iran retaliated by attacking ships bound for Iraq and Kuwait—a US-allied state that had supported Iraq with loans and safe harbor for its shipping. The tanker attacks became a grinding campaign of mutual attrition, with dozens of vessels struck, sunk, or damaged. Insurance rates on vessels transiting the Gulf doubled and tripled.

American Intervention

The United States, concerned about the disruption of global oil supply and aligned with Iraq against the Iranian Revolution, responded by establishing Operation Earnest Will in 1987. US Navy warships escorted Kuwaiti tankers that had been reflagged as American vessels, placing them under US protection.

The presence of American warships led to several naval confrontations. Most infamously, the USS Stark, a guided-missile frigate, was struck by an Iraqi Exocet missile on May 17, 1987. The attack killed 37 American sailors. Officially, Iraq claimed it was an accident; unofficially, it exposed how little control either side truly had over escalation in the confines of the Persian Gulf.

The Cost to Commerce

By 1988, an estimated 540 merchant vessels had been attacked in the Gulf. Insurance costs reached 4 percent of the cargo value—a massive burden on global trade. Shipping companies rerouted vessels around Africa or requested hazard pay for crews willing to transit the Gulf. The economic disruption rippled outward, affecting global oil prices and the economies dependent on Gulf petroleum.

The tanker war demonstrated a principle that would resurface in later Middle Eastern conflicts: conventional powers can impose significant costs on the global economy and on maritime commerce by deliberately targeting commercial shipping. It also showed that deterrence is difficult when one side of the conflict operates under revolutionary ideology and the other side has few effective retaliatory options.