Brent crude moved higher by 4.27 per cent to $112.00 per barrel on Wednesday as Iran attacked several energy facilities across the Middle East, creating a major escalation in its war with the United States and Israel.
Also, the US West Texas Intermediate grew by 2.73 per cent to $98.95, as the Middle East conflict continues to escalate, and energy infrastructure is targeted across the Gulf, as Iran hit energy infrastructure across the Middle East in retaliation for earlier strikes on its South Pars gas field.
Qatar confirmed that Iranian missile strikes had caused “extensive damage” around the Ras Laffan industrial complex, the world’s largest liquefied natural gas (LNG) facility and a cornerstone of global gas supply.
Meanwhile, the United Arab Emirates (UAE) suspended operations at its Habshan gas facility after missile-related incidents, with debris from intercepted projectiles reportedly affecting additional energy infrastructure, including the Bab oil field.
Saudi Arabia, Kuwait, Iraq, and Bahrain continue to be targeted by Iran, with Saudi Arabia reporting that air defences had destroyed a total of 19 drones in the Eastern Province and four missiles launched toward Riyadh.
Earlier on Wednesday, Iran issued an evacuation warning for several energy facilities across Saudi Arabia, the UAE and Qatar, saying they would be targeted by strikes “in the coming hours.”
Shipping also remained under threat, with the UK’s maritime security agency reporting that a vessel east of the Strait of Hormuz caught fire after being struck by an “unknown projectile.”
The war has halted shipments via the Strait of Hormuz, which handles 20 per cent of global oil and LNG supply. Total oil output cuts in the Middle East are estimated at 7 million to 10 million barrels per day, or 7 per cent to 10 per cent of global demand.
To ease worries, the administration of US President Donald Trump on Wednesday announced a 60-day waiver of the Jones Act shipping law, temporarily allowing foreign-flagged vessels to move fuel, fertiliser, and other goods between US ports.
It is also working on measures that could help slow the surge in fuel prices in the US, but are unlikely to have much of an effect on global energy prices.
In Iraq, the North Oil Company said crude exports from Iraq’s Kirkuk fields to Turkey’s Ceyhan port have resumed via pipeline, after Iraq and the Kurdistan Regional Government agreed to restart flows. The company said exports would resume with an initial capacity of 250,000 barrels per day.
The US Energy Information Administration (EIA) said crude inventories rose by 6.2 million barrels to 449.3 million barrels in the week ended March 13.