On March 19, world oil prices rose sharply after Iran launched attacks targeting many energy facilities in the Middle East, marking a new escalation in the conflict involving the US and Israel.
Brent oil prices increased by 3.8% to 107.38 USD/barrel and continued to increase by 5.6% in subsequent trading. US WTI crude oil increased slightly by 0.1% to 96.32 USD/barrel before increasing by 4% in expanded trading. The gap between WTI and Brent widened to the largest level in 11 years, due to increased supply in the US from strategic reserves and higher shipping costs.
Iranian missile attacks have caused significant damage to energy facilities in the region. Qatar's national oil company said that the Ras Laffan industrial complex was seriously damaged after being hit by a missile.
Saudi Arabia announced that it had intercepted multiple ballistic missiles aimed at Riyadh and prevented a drone attack on the gas facility.
Iranian state media reported that the country has warned of evacuation at some energy facilities in Saudi Arabia, the United Arab Emirates and Qatar, saying that these locations could continue to be attacked.
This development occurred after the attack on Iran's South Pars gas field, an event believed to have been carried out by Israel with the consent of the United States, although there has been no official confirmation.
Experts believe that the attack on energy facilities has pushed oil and gas prices up and any further escalation will continue to put pressure on the market.
The conflict has disrupted transportation through the Strait of Hormuz, which accounts for about 20% of global oil and liquefied natural gas supplies. Middle East oil production is estimated to decrease by 7 to 10 million barrels per day, equivalent to 7% to 10% of global demand.
The administration of President Donald Trump has introduced a number of measures to control domestic fuel prices, including easing transportation regulations under the Jones Act for 60 days and adjusting summer fuel standards. These measures are assessed to have only a limited impact on global energy prices.
Amid fluctuating supply, Iraq resumed oil exports from Kirkuk fields via pipelines to Turkey, with an initial capacity of 250,000 barrels per day. Libya also adjusted oil flows after the Sharara field fire incident.
In the US, crude oil inventories increased by 6.2 million barrels, while gasoline and distillate inventories decreased. Despite additional supply from some regions, the energy market is still under great pressure due to increased geopolitical risks.
