Oil prices climbed sharply in early Asian trading on Thursday as the Middle East conflict continued to escalate and energy infrastructure was targeted across the Gulf.
At the time of writing, Brent crude had climbed to $112.00, up 4.27%, while West Texas Intermediate had risen 2.73% to $98.95.
The latest price spike came after Iran targeted 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 facility and a cornerstone of global gas supply.
Meanwhile, the United Arab Emirates 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.
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.”
These coordinated strikes and the prior evacuation warnings issued for regional energy facilities reveal Iran’s strategy of targeting the Gulf’s energy backbone to increase prices and therefore pain for the U.S., Israel, and their allies.
Reports indicate that the US is now considering deploying additional military assets to the region, redoubling efforts to secure shipping through the Strait of Hormuz. With no sign of de-escalation in sight, the upward pressure on oil prices looks set to continue.
By Josh Owens for Oilprice.com
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