Iran targeted Bahrain's Bapco Energies oil refinery with a drone strike early Monday, marking a significant escalation in the ongoing regional conflict.

The attack occurred in the Sitra area south of Manama, where thick smoke rose from the facility, Bahrain's primary oil processing hub with a capacity of 380,000 barrels per day. A fire broke out at one unit of the refinery but was quickly contained, with no disruption to domestic fuel supplies reported. Bapco Energies declared force majeure on its group operations affected by the strike and the wider conflict, citing the need to assess damage.

Bahrain's government confirmed injuries and damage from Iranian aggression in Sitra, with state media reporting 32 civilians wounded, including four minors and a 2-month-old baby. Four injuries were described as serious. No fatalities were reported from the refinery strike itself.

Bahrain's King Hamad bin Isa Al Khalifa condemned the attacks as "unjustifiable," while the National Communication Centre attributed the refinery hit to an Iranian missile. The kingdom has intercepted dozens of incoming drones and missiles since late February.

The strike is part of Iran's retaliatory campaign following U.S. and Israeli operations against Iran on February 28, 2026, aimed at curbing Tehran's nuclear program. Previous Iranian actions included hits on the U.S. Fifth Fleet headquarters in Bahrain, Mina Salman Port, and other infrastructure, with Bahrain reporting limited material damage and one civilian death earlier.

Arab states swiftly denounced the assault. Saudi Arabia called Iran's actions "reprehensible" and unacceptable, reserving the right to defend its security. Qatar's foreign ministry blamed Iran for civilian casualties across the Gulf and warned of destabilizing escalation.

Global markets reacted sharply, with crude oil prices surpassing $100 per barrel for the first time since 2022 amid fears of supply disruptions in the energy-rich Gulf. European natural gas prices rose 19%, reflecting broader concerns over the conflict's spread.

The U.S., which maintains its naval presence in Bahrain, has not detailed any direct involvement in Monday's incident but continues operations alongside Israel against Iranian targets. Bahrain, a key U.S. ally hosting the Fifth Fleet, has bolstered defenses as strikes widen to civilian and energy infrastructure.