Oil prices near new four-year high as Iran war intensifies

Oil prices surged to within a few cents of a fresh four-year high on Thursday after Iran struck energy facilities across the Gulf in response to Israeli attacks on its gas fields.

The intensifying conflict, which began on February 28 with US-Israeli bombings across Iran, has roiled the global energy sector. Iran has closed the Strait of Hormuz to most shipping.

About one-fifth of global oil and liquified natural gas (LNG) supplies would usually transit the narrow channel south of the country’s shores.

Brent crude was up 7.1 percent at $115 a barrel as of 10:04 GMT, having hit a daily peak of $119.11 in early trade, which is 41 cents below the four-year high of March 9.

On Wednesday, Israel bombed Iran’s South Pars gas field. Tehran shares the field, which is the world’s largest, with Qatar. In response, Iran struck energy and petrochemical facilities in Saudi Arabia, the UAE and Qatar.

State-owned Qatar Energy, which had already halted LNG production, said several of its LNG facilities were hit by missiles, “causing sizeable fires and extensive further damage”. Qatar is the world’s third largest producer of LNG.

European gas prices surged 19 percent to a two-year high of €65 per megawatt-hour as of 10:15 GMT.

Further reading:

• Hormuz supply squeeze lifts jet fuel prices to 10‑year high
• Fujairah’s importance grows with each day Hormuz remains closed
• Oil seeps from the strait but returning full flow is not easy