Oil Prices Soar, Energy Attacks Widen, and Supply Risks Grow
Oil prices surged after attacks targeted some of the Middle East's most important energy facilities, heightening concerns that the conflict, now nearing its third week, is moving into a more supply-damaging phase. Brent rose as much as 9% to around US$117 per barrel, while the regional diesel benchmark traded above US$180 per barrel—a nearly four-year high. European natural gas also surged 35%, underscoring the widespread shock across energy commodities.
The escalation was triggered by Iran's attack on Qatar's main LNG site at Ras Laffan, following the earlier targeting of assets related to the giant South Pars gas field. Saudi Arabia assessed damage at the Samref refinery and reported the interception of a ballistic missile headed for Yanbu, the kingdom's main alternative export route when the Strait of Hormuz was nearly closed. Meanwhile, Abu Dhabi suspended operations at its Habshan gas facility after a missile interception caused debris to fall, while Bahrain denied reports that its LNG facility had been hit.
The physical oil market reacted quickly: physical oil prices surged as Asian refineries scrambled for replacement cargoes, while WTI's discount to Brent widened to around US$17 per barrel—the largest in more than a decade—amid US supplies lagging behind global benchmarks and hedging activity. The surge in diesel prices reinforced signals that inflationary risks from the war were rising, potentially complicating central banks' policy paths as energy costs again put downward pressure on consumer prices and the transportation sector.
Some analysts believe the war has entered a new phase as energy infrastructure has become a direct target, opening the door to further upward pressure in the coming days. Market focus remains on the ripple effects of the effective closure of Hormuz, the potential for broader disruptions to production and export facilities, and possible policy responses to contain prices—including talk of US measures such as curbing crude oil exports to curb the energy surge. (alg)
Source: Newsmaker.id
