LONDON: Benchmark Brent oil prices jumped above $119 a barrel on Thursday after Iran attacked energy facilities across the Middle East following Israel’s strike on its South Pars gas field, a major escalation in the war.
Brent futures were up $6.02, or 5.6%, at $113.40 a barrel by 1237 GMT. Earlier in the session, Brent had climbed more than $11 to a high of $119.13, close to the three-and-a-half-year peak touched on March 9.
U.S. West Texas Intermediate crude was up 7 cents, or 0.1%, at $96.39 a barrel, after earlier gaining almost $4 to trade at $100.02. WTI has been trading at its widest discount to Brent in 11 years.
Meanwhile, Middle East benchmark Dubai and Oman premiums hit all-time highs at about $65 per barrel, according to trade sources and Reuters data.
The U.S. central bank held interest rates steady on Wednesday, projecting higher inflation as policymakers take stock of the impact of the war.
U.S. President Donald Trump’s administration is keen to counteract rising fuel costs ahead of November elections and Treasury Secretary Scott Bessent said the U.S. may soon remove sanctions from Iranian oil that is stranded on tankers, amounting to around 140 million barrels.
ATTACKS AND COUNTER-ATTACKS
Israel attacked Iran’s South Pars gas field, but the U.S. and Qatar were not involved, Trump said late Wednesday. South Pars is the Iranian sector of the world’s largest natural gas deposit, which Iran shares with U.S. ally Qatar on the other side of the Gulf.
Trump added that Israel would not attack Iranian facilities in South Pars again unless Iran attacked Qatar, and warned that the U.S. would also respond if Iran acted against Doha.
On Wednesday, QatarEnergy had said Iranian missile attacks on Ras Laffan, the site of Qatar’s core LNG plants and the world’s largest, caused “extensive damage”. The attack also hit Shell’s 140,000 barrel-per-day Pearl gas-to-liquids plant in Qatar, halting output.
European gas prices soared to their highest in more than three years.
Saudi Arabia said it intercepted four ballistic missiles and an attempted drone attack on a gas facility.
Saudi Aramco’s SAMREF refinery, in which Exxon holds a stake, in the Red Sea port of Yanbu, was also targeted in an aerial attack on Thursday. Oil loadings at the port were disrupted but have now resumed.
Kuwait Petroleum Corporation said its Mina al-Ahmadi refinery was hit by a drone, igniting a limited fire.
Earlier, Reuters reported that Trump’s administration is considering deploying thousands of U.S. troops to reinforce its operation in the Middle East.