As Oil Prices Spiral, Damage to Infrastructure ‘Makes It Even Worse’
Key Takeaways
- Attacks on Persian Gulf energy facilities threaten to worsen global oil and gas supply.
- Damage could complicate rebuilding and restarting production for Gulf nations after the war ends.
- Global fuel prices rise as disruption threatens oil and gas supply.
Threat to Gulf energy resilience
Attacks on energy infrastructure across the Persian Gulf this week threaten to complicate efforts to repair and restart oil and natural gas operations when the war ends.
“War in theMiddle East Advertisement Supported by Attacks on oil and natural gas facilities this week could make it much harder for Persian Gulf countries to rebuild and restart production when the war eventually ends”
The week saw attacks that damaged energy sites across the region, including at Qatar’s main state-owned energy company, which reported sizable fires and extensive further damage on Thursday after similar strikes on Wednesday.
The disruptions could complicate the ability of Gulf producers to resume production, with Asian buyers facing the greatest risk of shortages and the global oil and gas market likely to feel the pain.
Oil price reactions and cautions
Prices are already moving higher amid the disruption.
International oil prices at one point on Thursday jumped more than 10 percent, to around $119 a barrel, before retreating after President Trump said he had told Israel not to attack Iranian energy facilities and that the war would end soon.
Liquefied natural gas prices rose about 12 percent in Europe.
Bob McNally, president of Rapidan Energy Group, warned that prices will march up whether there is damage or not and that damage would make things worse.
Blame game and new strikes
Blame and counterclaims intensified as the conflict widened.
“War in theMiddle East Advertisement Supported by Attacks on oil and natural gas facilities this week could make it much harder for Persian Gulf countries to rebuild and restart production when the war eventually ends”
On Wednesday, Iran and Qatar blamed Israel for striking Iran’s South Pars natural gas field, which provides fuel for power plants in Iran.
Hours later, Qatar accused Iran of attacking Ras Laffan Industrial City, a large complex on the Persian Gulf.
On Thursday, there were further strikes at refineries and gas facilities in Kuwait, Qatar and Saudi Arabia.
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