Oil Jumps as Major Energy Assets Are Hit in the Middle East Conflict
Oil prices advanced after attacks struck some of the Middle East’s most important energy facilities, heightening fears that the nearly three-week-old conflict could inflict a deeper and longer-lasting shock on global supply.
Brent crude rose as much as 3.4% to $111.02 a barrel, while the most-active WTI contract traded near $98. U.S. natural gas jumped as much as 5.6%. Iran carried out an attack on a major LNG site in Qatar, one of several regional assets it pledged to target after strikes hit Iran’s giant South Pars gas field.
Oil has surged roughly 50% since the war began, disrupting the Middle East by effectively choking off shipping through the Strait of Hormuz and forcing cuts across oil and gas production. Until recently, Iran’s upstream energy system had largely been spared, helping limit expectations of an escalation that could have a bigger impact on longer-term supply. The latest strikes, however, are shifting the market’s focus toward the risk of direct damage to infrastructure—potentially slowing any recovery in flows even after hostilities ease.
“The market is still underestimating and not fully pricing the risk of how quickly this could escalate into direct hits on wider Gulf energy infrastructure,” said Haris Khurshid, CIO at Karobaar Capital LP. “If this escalates into direct hits then $120 won’t be the ceiling, it’ll be the starting point. To see $140 to $160 won’t be crazy at all,” he added, referring to Brent prices.
The Wall Street Journal reported that President Donald Trump knew in advance about the Israeli strike on South Pars but wants no further attacks on Iranian energy sites. Trump has also said targeting oil infrastructure at Iran’s main export hub, Kharg Island, remains on the table after earlier strikes on military targets there. Analysts warn that pressure on Hormuz limits the ability to declare a quick victory, since shipping security and energy flows remain unresolved.
Qatar’s Ras Laffan Industrial City—the complex housing the world’s largest LNG export plant—suffered “extensive damage” after a missile strike, local authorities said. South Pars is critical for Iran’s domestic supply as well as flows to neighboring Iraq and Turkey, and associated oil and petrochemical assets were also struck at Asaluyeh.
“A retaliatory attack on Ras Laffan is exactly what the global natural gas market feared the most,” said Tom Marzec-Manser, Europe gas and LNG director at Wood Mackenzie. “We’re yet to know which part of the industrial complex has been damaged, but either way it’s going to be bullish for gas prices when the market opens on Thursday.”
Elsewhere, Abu Dhabi said it halted operations at its Habshan gas facilities after intercepted missiles caused debris to fall. Iran’s semi-official Fars news agency also reported that LNG assets in Bahrain—which Tehran views as tied to U.S. interests—were hit by heavy missile strikes.
On the policy front, RBC Capital Markets said the U.S. may consider a crude export levy or even a ban to combat surging energy prices, as the gap between WTI and the global Brent benchmark has widened—ballooning to a discount of nearly $12 a barrel. Trump has also temporarily waived the century-old Jones Act to lower the cost of transporting oil, gas, and other commodities around the U.S. Meanwhile, Vice President JD Vance and other senior officials are scheduled to meet oil executives on Thursday.
In the latest pricing, Brent for May rose 3.2% to $110.80 a barrel at 8:03 a.m. in Singapore. WTI for May gained 3.4% to $98.68, while the less-active April contract—expiring Friday—advanced 3.4% to $99.55.
Source : Newsmaker.id
