Oil prices jump to $112 per barrel after Iran energy strike

Oil prices increased on Thursday after tensions in the Middle East became more serious. Prices went up after Iran attacked energy facilities across the region following a strike on the South Pars gas field, showing a major escalation in the conflict involving the United States and Israel.

The global oil benchmark, Brent crude, saw a strong rise. Brent futures went up by $4.66 (4.3%) to $112.04 per barrel by early morning. Earlier, prices had jumped by more than $5, reaching $112.86 per barrel.

Meanwhile, West Texas Intermediate crude also increased. It rose by 96 cents (1%) to $97.28 per barrel, after earlier gaining over $3. On Wednesday, Brent had already closed up by 3.8%, while WTI remained almost unchanged.

Experts say WTI has been trading at a lower price compared to Brent for the past 11 years. This is mainly due to oil releases from US reserves and higher shipping costs. At the same time, fresh attacks on energy facilities in the Middle East have supported Brent prices.

“Escalation in the Middle East, precise attacks on oil infrastructure, and the death of Iranian leadership all point to a prolonged disruption in oil supplies,” said Priyanka Sachdeva.

She also added, “Adding fuel to the fire, the Federal Reserve served ‘steady rates’ with a hawkish narrative, pointing to the economic concerns that follow a war.”

The Federal Reserve decided to keep interest rates unchanged on Wednesday, while warning that inflation could rise due to the ongoing conflict.

On the same day, QatarEnergy reported that Iranian missile attacks on Ras Laffan, the country’s main LNG processing site, caused “extensive damage” to its energy hub.