Brent crude traded at $108.65 per barrel on Thursday after earlier hitting $119 during the session, as the Middle East crisis took a different dimension.
Prices had surged dramatically on the back of an Israeli attack on the South Pars gas field and an Iranian attack on energy infrastructure across the region. The escalations briefly pushed Brent beyond $119 per barrel earlier on Thursday, as fears of further serious supply disruptions peaked.
Supply disruptions intensified following the Iranian attack on Qatar’s Ras Laffan Industrial City (RLIC), which hosts the world’s biggest LNG liquefaction complex.
Qatar had already halted the Ras Laffan LNG complex in the early hours of the war, mostly as a precaution following a drone attack near the site and because of the de facto closure of the Strait of Hormuz.
The market is desperately looking to replace disrupted supply with US oil now being directed through the Panama Canal to help deal with the shortfall in Asia.
Meanwhile, US Treasury Secretary Scott Bessent said the US may soon remove sanctions from Iranian oil that is stranded on tankers, amounting to around 140 million barrels.
He also said another release of crude oil from the US Strategic Petroleum Reserve was possible.
Saudi Arabia said it intercepted four ballistic missiles and an attempted drone attack on a gas facility. Its SAMREF refinery in the Red Sea port of Yanbu, was also targeted in an aerial attack on Thursday. Oil loadings at the port were disrupted but have since resumed.
Kuwait Petroleum Corporation said its Mina al-Ahmadi refinery was hit by a drone, igniting a limited fire.
Israeli Prime Minister Benjamin Netanyahu suggested the Iran war could end sooner than expected, saying that joint US-Israel strikes had significantly degraded Iran’s strategic capabilities and that the war would “end faster than people think.”
He emphasised that the campaign would not be open-ended and indicated that Israel would refrain from further attacks on Iran’s South Pars gas field at the request of President Donald Trump.
The move helped ease immediate concerns about further escalation targeting critical energy infrastructure.