Iran warned Wednesday it could wage a long war with the US and Israel that would "destroy" the world economy, as it effectively closed off transit through the Strait of Hormuz.
Under political pressure over the economic fallout from the war, US President Donald Trump said the conflict would end "soon" and promised "great safety" for vessels in the strategic waterway.
Oil prices have surged since February 28, when the United States and Israel launched air strikes on Iran, killing its supreme leader and plunging the Middle East into war.
The Strait of Hormuz accounts for a fifth of the world's oil supplies, and a mix of Iranian missile strikes and drone barrages has brought shipping through the passage almost to a halt.
World economies have scrambled to try to manage prices, with member states of the International Energy Agency agreeing a record release of 400 million barrels of oil from their reserves.
"This is a major action aiming to alleviate the immediate impacts of the disruption in markets," IEA Executive Director Fatih Birol told reporters.
"But to be clear, the most important thing for a return to stable flows of oil and gas is the resumption of transit through the Strait of Hormuz."
Oil prices still edged higher after Tehran fired on two commercial ships in the Gulf, setting at least one vessel on fire.
During a trip to Ohio, Trump said US forces had struck 28 Iranian mine-laying vessels.
There is "practically nothing left to target" and the war will end "soon", Trump was also quoted as saying in an interview with news outlet Axios.
Israel, however, said there was still "a broad bank of targets".
"We will expand our operations," military spokesman Brigadier General Effie Defrin said in a televised briefing.
- Gulf attacks -
With the conflict now in its 12th day, Iran's Revolutionary Guard vowed to target "economic centres and banks" that it deems linked to US and Israeli interests, prompting more international firms to evacuate employees from Dubai.
The US and Israel "must consider the possibility that they will be engaged in a long-term war of attrition that will destroy the entire American economy and the world economy", Ali Fadavi, adviser to the Revolutionary Guards' commander-in-chief, told state television.
Iran said it had struck the two ships in the Gulf because they had entered the Strait of Hormuz "after ignoring the warnings" of its navy.
Oman's navy rescued 20 crew members from one of the ships, the Thai bulk carrier Mayuree Naree.
Pictures shared by the Thai navy showed black smoke pouring out of the vessel.
Analysts say a prolonged closure of the strait, which also carries a third of the fertiliser for world food production, would have a devastating effect on the global economy, particularly in Asia and Europe.
"While we have faced disruptions in the past, this one by far is the biggest crisis the region's oil and gas industry has faced," said Amin H. Nasser, CEO and president of Saudi state energy giant Aramco.
French President Emmanuel Macron urged G7 leaders to act to restore navigation there "as soon as possible", while the UN urged all parties to allow humanitarian cargo to transit.
The UN Security Council passed a resolution calling for Iran to immediately halt its attacks on Gulf states.
Iran has wreaked havoc on the Gulf's energy production and commercial aviation -- two economic cornerstones.Â
On Wednesday, drones fell near Dubai airport, injuring four people, the city's government said.
Drones also hit fuel tanks at Oman's Salalah port, Oman News Agency reported.
And in an apparent first since the war began, Israeli drones carried out attacks in Tehran on Wednesday evening, killing members of the security forces, Iran's Fars news agency reported.
- Fireball in Beirut -
Lebanon was drawn into the war last week when Iran-backed militant group Hezbollah attacked Israel in retaliation for the killing of Iranian supreme leader Ayatollah Ali Khamenei.
Israeli strikes on Wednesday hit an apartment building in central Beirut.
AFPTV's live broadcast captured the sound of an air strike followed by a fireball erupting.
When the strike hit, "I ran from room to room, pulled my wife and daughter out of the rooms and hid them behind a wall, then the second strike hit", said Fawzi Asmar, owner of a bakery on the same street.
Israel launched a new wave of strikes later in the evening, saying it was responding to rocket fire from Hezbollah.
Lebanon said the death toll in 10 days of fighting between Israel and Hezbollah had reached 634, while more than 800,000 people have registered as displaced.
- 'Enemies' -
The Israeli-US attacks came weeks after Iranian authorities crushed mass protests, although the United States and Israel say they are not necessarily seeking to topple the Islamic republic.
Iranian authorities warned against dissent at home, with the country's police chief Ahmad-Reza Radan saying protesters would be viewed and dealt with as "enemies".
"Even in the midst of a crisis, it (Iran) seizes the opportunity for repression," Nobel peace prize laureate Shirin Ebadi wrote in a post on Telegram.
Iran's new supreme leader, Ayatollah Mojtaba Khamenei has yet to appear in public, and on Wednesday officials said the new ayatollah was injured but "safe".
Iran's health ministry said on March 8 that more than 1,200 people had been killed in US and Israeli strikes. AFP was not in a position to independently verify the figures.
Thousands of people in Tehran defied ongoing bombardments to publicly mourn slain commanders killed, in the largest gathering since the start of the war, carried out under a heavy security presence.
A senior military adviser to new supreme leader Ayatollah Mojtaba Khamenei became the latest Iranian official to strike a defiant tone on Wednesday, calling Trump "corrupt and stupid", and "Satan himself".
Yahya Rahim Safavi also reiterated Iran's longstanding threats to eradicate Israel.
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