Oil Prices Climb as Iranian Strikes Hit Middle East Energy Facilities

Oil Market Reaction and Price Moves

By 0142 GMT on Thursday, Brent crude futures were up $3.69, or 3.44%, at $111.07 per barrel. U.S. WTI crude rose $2.29, or 2.38%, to $98.61. Brent had already closed 3.8% higher on Wednesday, while WTI settled nearly flat.

WTI has been trading at its widest discount to Brent in 11 years. According to the available information, this divergence has been driven by releases from U.S. strategic reserves and higher freight costs, while heightened security risks and fresh attacks on Middle Eastern energy infrastructure have provided comparatively stronger support to Brent.

Oil prices are likely to remain supported as Iran’s latest strikes deepen regional tensions. The source indicates there is no sign of de-escalation in the conflict or a near-term reopening of the Strait of Hormuz.

Impact on Regional Energy Infrastructure

Iran’s attacks followed strikes on its own energy infrastructure in South Pars and Asaluyeh. South Pars is described as the Iranian sector of the world’s largest natural gas deposit, shared with Qatar on the other side of the Gulf. Iran issued evacuation warnings before its retaliatory attacks for several oil facilities across Saudi Arabia, the United Arab Emirates (UAE) and Qatar.

QatarEnergy reported on Wednesday that Iranian missile attacks on Ras Laffan, the site of Qatar’s core LNG processing operations, caused “extensive damage” to this major energy hub. In the UAE, some energy operations were shut after incidents at the Habshan gas facilities and the Bab oil field caused by falling debris from intercepted missiles.

Saudi Arabia stated it intercepted and destroyed four ballistic missiles launched toward Riyadh on Wednesday, as well as an attempted drone attack on a gas facility.

Reuters reported that the administration of U.S. President Donald Trump is considering deploying thousands of U.S. troops to reinforce its operation in the Middle East. Options under consideration include providing safe passage for oil tankers through the Strait of Hormuz, primarily using air and naval forces.

FAQ

What triggered the latest rise in oil prices?
Oil prices increased after Iran attacked multiple energy facilities across the Middle East in response to strikes on its South Pars gas field, intensifying regional conflict and supply risk.

How did Brent and WTI crude prices move?
By 0142 GMT Thursday, Brent futures rose 3.44% to $111.07, while WTI increased 2.38% to $98.61. Brent had closed 3.8% higher on Wednesday, whereas WTI ended that session nearly flat.

Why is WTI trading at a wide discount to Brent?
WTI is at its widest discount to Brent in 11 years due to releases from U.S. strategic reserves and higher freight costs, while attacks on Middle Eastern energy facilities have added specific support to Brent.

What security measures are being considered for the Strait of Hormuz?
According to Reuters, the U.S. administration is considering deploying thousands of troops, with options including air and naval operations to provide safe passage for oil tankers through the Strait of Hormuz.