Iran’s targeting of Middle East energy has pushed oil prices above the $100 per barrel level.
with market experts expressing concern over the potential for long-term damage to the industry.
Brent crude prices rose to $101 overnight after it emerged that major infrastructure on both land and sea in the Gulf countries had been damaged or destroyed.
The incident that unfolded was an Iranian attack on two fuel tankers in Iraqi waters near Basra, using explosive-laden boats.
Iran War – Follow Live
Iraq responded by suspending operations at all of its oil ports. More attacks were reported on Thursday, affecting Dubai and Bahrain, which raised concerns about the stability of the region and its impact on global oil supply.
Market analysts suggested that the Iranian regime’s apparent strategy of targeting energy risks long-term losses in production, prompting efforts to normalise oil and gas flows after the conflict ends.
Prices fell from peaks of $118 on Monday due to the war, when it emerged that the International Energy Agency (IEA) was planning to coordinate a record release of strategic oil reserves to partially compensate for lost flows into the market due to the effective closure of the key Strait of Hormuz shipping route
The blockade has deprived the world of one-fifth of its oil and natural gas supplies.
It was confirmed on Wednesday that stored oil will be gradually released by more than 30 countries. Values ​​not taken down Furthermore, it became clear the attacks were intensifying, leading to increased concerns about global energy security and potential further disruptions in oil and natural gas supplies.
A tanker is seen listing after being attacked in Iraqi waters. Photo: Reuters
In its regular monthly market report released Thursday morning, the IEA warned, “The war in the Middle East is causing the largest supply disruption in the history of the global oil market.”
It pointed to the estimated impact on global supply of eight million barrels of oil per day this month and said 10% of world production had been lost due to the shutdown.
Brent was trading just below the $100 mark on Thursday afternoon – threatening to put further pressure on fuel prices in Britain’s backyard, where diesel costs have risen an average of 9% since the war began.
Two tankers caught fire after Iran’s attack
Wholesale gas prices in Britain rose more than 4% on the day – up 74% this month.
The changes currently only put the cost of new fixed-rate deals at risk for households because the adjustments to the energy price capere announced before hostilities began in the Middle East.
Would releasing emergency oil reserves reduce costs?
However, these rising prices pose a risk of a renewed surge in inflation as they pass down the supply chain, impacting everything from manufactured goods to services.
Such developments could result in higher borrowing costs being imposed by the Bank of England, which will be keen to help prevent any higher periods of price rises in the economy.
Read more from Sky News:
John Lewis makes first bonus payment in four years
MPs to investigate student loans
Market analysts have consistently warned that the duration of disruption to oil and gas flows will be key in determining the price outlook.
The trouble now, he says, is that volumes will take longer to recover due to the increasing extent of damage to infrastructure and there are insufficient stocks for a second 400 million barrel bailout, which could lead to further volatility in oil prices and impact global markets.
Iran’s attacks contradict Donald Trump’s claims that US military objectives have been almost met and the war is almost over.
Saxo’s UK investor strategist, Neil Wilson, said of the situation, “The problem for the IEA is that it will be hard to do much… but that’s OK because Trump said, ‘We’ve won.'”
“The longer the shooting continues, the more the market will discount such comments,” he said.
