Global oil prices have rocketed more than 5 per cent in the wake of an Israeli strike on Iran’s massive South Pars natural gas field, as the U.S.-supported military push against Tehran shows no signs of abating.
This supergiant reserve, shared with Qatar and holding nearly 40 per cent of the world’s proven gas supplies according to the U.S. Energy Information Administration, lies offshore from Bushehr province and normally churns out over 700 million cubic metres daily.
Brent crude, the global pricing standard, leaped 5 per cent to $108.66 per barrel on Wednesday, while West Texas Intermediate—the U.S. benchmark—gained 2.5 per cent to $98.65. The resulting spread between the two hit its widest point since May 2019, driven by investor jitters over a drawn-out war that threatens vital energy flows.
Iranian state media reported damage to gas processing units at South Pars, prompting a fierce riposte from the Revolutionary Guard, which threatened to attack oil and gas infrastructure in Qatar, Saudi Arabia, and the United Arab Emirates. Qatar swiftly confirmed a fire at its Ras Laffan LNG hub following an Iranian missile attack, though the Interior Ministry said it was quickly contained without major fallout.
The U.S.-Israeli war on Iran and Tehran’s reprisals against Gulf neighbours have thrown Middle East energy exports into disarray, idling refineries and fields in a crisis reminiscent of the 2019 Abqaiq assaults but far more disruptive, as the BBC has observed.
Naval clashes have all but shut the Strait of Hormuz, a conduit for one-fifth of global oil and a third of LNG. OPEC+ now estimates regional output losses at 7 to 10 million barrels per day, matching 7 to 10 per cent of world demand.
In swift countermeasures, the Trump administration granted a 60-day Jones Act waiver, enabling foreign ships to move fuel, fertilisers, and goods between U.S. ports—echoing relief efforts during Hurricane Maria. The Treasury also authorised limited dealings with Venezuela’s PDVSA for backup crude. Iraq’s North Oil Company resumed pipeline exports after a Baghdad-Kurdistan pact, aiming for 100,000 barrels per day via ports.
Experts at the International Energy Agency warn that prolonged price spikes could fuel worldwide inflation, hammering consumers and businesses alike.