Oil Prices Rise Following Israeli Strike in Iranian Gas Field

Global Oil Prices Rise Amid Escalating Conflict in Iran

Oil prices have increased by more than 5 percent following an Israeli strike on Iran’s South Pars gasfield. The attack occurred as tensions between Israel and Iran continue to escalate. As a result, Brent crude rose 5 percent to $108.66 a barrel, while US West Texas Intermediate crude gained 2.5 percent to $98.65.

Iranian state media reported that natural gas facilities associated with the South Pars field were targeted. The Revolutionary Guard subsequently threatened to attack oil and gas infrastructure in Qatar, Saudi Arabia, and the United Arab Emirates, raising concerns about potential disruptions to energy supplies in the region.

A fire was reported at Qatar’s Ras Laffan gas facility after an Iranian ballistic missile attack. Authorities later confirmed that the fire had been brought under control. The US-Israeli conflict has disrupted oil and natural gas exports from the Middle East, resulting in production stoppages.

Experts warn that prolonged disruptions to energy supplies could lead to a wave of global inflation. Disruptions have halted most shipments via the Strait of Hormuz, which accounts for 20 percent of global oil and liquified natural gas supplies. Total oil output cuts in the Middle East are estimated at 7 million to 10 million barrels per day.

In response to the disruptions, the Trump administration announced a 60-day waiver of the Jones Act shipping law, allowing foreign-flagged vessels to move fuel, fertiliser, and other goods between US ports. The US Treasury Department also issued a general licence authorising certain deals involving Venezuela’s state oil company PDVSA. In Iraq, exports have resumed via pipeline after Baghdad and the Kurdistan Regional Government agreed to restart flows.

Source: Al Jazeera