Blog Details

• Iran’s intelligence minister, Esmaeil Khatib, killed 

•Qatar expels Iranian envoy after missile attack

• British military experts sent to US to work on reopening Strait of Hormuz

Emmanuel Addeh in Abuja

Brent crude spiked more than 5 per cent to over $110 a barrel yesterday after Israel struck the world’s largest natural gas reserve located in Iran in a coordinated operation with the United States.

The attack marked the first time Iran’s upstream oil and gas infrastructure, as opposed to those in the gulf, has been targeted since the war began on February 28 as the crisis entered its 19th day.

Iran shares its massive South Pars gas field with Qatar, which uses its side to supply roughly a fifth of the world’s LNG. Qatar’s foreign ministry condemned the strikes as “a dangerous and irresponsible step.”

Iran’s response was a bit tougher. Tehran sent out a list of energy facilities it planned to strike, including those in Saudi Arabia, the UAE, and Qatar, naming specific targets including Saudi Aramco’s Samref refinery and Jubail petrochemical complex and the Al Hosn gas field in the UAE. Iran’s military joint command said it would escalate the war “in new ways.”

The price moves came on top of what has already been one of the strongest oil rallies in years. Brent has surged roughly 80 per cent since the conflict began, driven largely by the near-total shutdown of tanker traffic through the Strait of Hormuz, the chokepoint that handles about 20 per cent of global oil and gas flows.

The International Energy Agency (IEA) last week announced the largest emergency reserve release in its history—400 million barrels—and the U.S. committed to tapping 172 million barrels from the Strategic Petroleum Reserve over 120 days. So far, the reserves have done little to contain prices. Gas prices have spiked to the highest levels since 2023, up nearly a dollar since the war with Iran began.

But the spike in WTI crude, the benchmark for Texas oil, is nothing compared to what’s happening across the Pacific. Dubai crude—the pricing benchmark for Asian buyers—hit an all-time high above $150 a barrel last week. Oman crude settled above $152 on Monday.

WTI, meanwhile, is trading around $96 in the U.S. That’s an unprecedented $50-plus gap for the same commodity, which normally has a spread of $5-$8, Fortune Media reported. Physical crude in Asia is also trading at a nearly $40 premium over its paper equivalent, a sign that actual barrels are far scarcer than futures suggest.

Analysts fear that the shortage in Asia could conflagrate into a more dire global scenario if the war continues. Rory Johnston, a commodities analyst specialising in oil, wrote that the longer the Strait stays closed, the more Asia’s supply shortage becomes everyone’s problem.

Iran Hits Qatar’s Ras Laffan in Retaliation

Also yesterday, the Ras Laffan industrial complex sustained damage after a missile attack, QatarEnergy said. “Emergency response teams were deployed immediately to contain the resulting fires, as extensive damage has been caused,” QatarEnergy added.

Qatar’s interior ministry attributed the attack to Iran and said that it has “gained preliminary control over the fire at Ras Laffan, with no reported injuries”.

Tehran earlier on Wednesday listed the 305,000 b/d Ras Laffan refinery in Qatar among five downstream facilities it said it would attack shortly in retaliation for what it described as US-Israeli strikes on Iranian gas treatment plants at the South Pars gas field.

It was not immediately clear whether the refinery or the nearby 77mn t/yr LNG export terminal were directly attacked or sustained any damage.

Tehran also threatened strikes against the 400,000 b/d Samref refinery at Yanbu and the Sadara petrochemical complex at Jubail in Saudi Arabia, Qatar Chemical in Doha and the Al-Hosn sour gas field in Abu Dhabi.

Besides, Saudi Arabia came under attack on Wednesday night local time, according to the Saudi defense ministry. “Part of an intercepted ballistic missile” fell near a refinery located south of Riyadh, the ministry said. It also reported intercepting drones aimed at an unnamed gas facility in the country’s east.