Oil Prices Surge Past $119 as Middle East Conflict Escalates with Attacks on Energy Infrastructure

BY COMFORT OGBONNA

Global oil markets surged on Thursday as escalating hostilities across the Middle East pushed crude prices sharply higher, raising fears of a prolonged disruption to global energy supplies. Benchmark crude briefly climbed above $119 per barrel after Iran launched strikes on energy facilities throughout the region in retaliation for Israel’s earlier attack on a key natural gas field.

The spike in prices reflects growing anxiety among investors and energy traders that the conflict could severely damage critical oil and gas infrastructure in the Gulf, a region responsible for a significant share of the world’s energy exports. Analysts warn that continued attacks on energy facilities could send oil prices even higher while amplifying inflationary pressures on economies already grappling with elevated energy costs.

The global benchmark Brent Crude jumped sharply during Thursday trading. Futures rose $7.39, or about 6.9%, to reach $114.77 per barrel by mid-morning in London. Earlier in the session, Brent prices had surged by more than $10, briefly touching $119.13 per barrel, close to the highest level seen in more than three years. The dramatic rise highlights the sensitivity of global oil markets to geopolitical instability in the Middle East.

Meanwhile, the U.S. oil benchmark West Texas Intermediate recorded a more modest increase. WTI prices rose 27 cents to $96.59 per barrel after earlier climbing nearly $4 and briefly trading above $100. Despite the rally, the U.S. benchmark continues to trade at its widest discount to Brent in more than a decade, a gap attributed to strong domestic supply and logistical factors affecting global crude flows.

The surge in oil prices comes just as the Federal Reserve opted to keep interest rates unchanged during its latest policy meeting. Central bank officials warned that energy-driven price pressures could push inflation higher, complicating efforts to stabilize the U.S. economy and determine the timing of future rate cuts.

The latest escalation began after Israel launched a strike against Iran’s portion of the South Pars gas field, the Iranian sector of the largest natural gas deposit in the world. The enormous field spans the Persian Gulf and is shared by Iran and Qatar, making it one of the most strategically important energy reserves on the planet.

Following the attack, Iran retaliated by launching strikes on energy facilities across the region, dramatically raising the stakes of the conflict. The back-and-forth attacks have heightened concerns that critical infrastructure used for oil production, refining, and liquefied natural gas exports could become frequent targets as tensions escalate.

U.S. President Donald Trump stated late Wednesday that neither the United States nor Qatar had any involvement in the Israeli strike on the South Pars gas field. Trump also indicated that Israel had pledged not to attack facilities within the South Pars complex again unless Iran targeted Qatar.

The U.S. president also warned that Washington would respond if Iranian forces carried out attacks against Qatari infrastructure, signaling that the conflict could widen further if energy facilities belonging to U.S. allies come under threat.

The retaliation has already had significant consequences for the global energy industry. QatarEnergy reported that Iranian missile strikes caused extensive damage to facilities at Ras Laffan, the world’s largest liquefied natural gas export terminal. The Ras Laffan complex serves as the backbone of Qatar’s LNG industry and plays a crucial role in supplying natural gas to markets in Europe and Asia.

Following the attack, European natural gas prices surged to their highest level in more than three years, reflecting fears that disruptions to LNG shipments could worsen the continent’s already fragile energy situation.

Elsewhere in the region, Saudi Arabia reported intercepting and destroying four ballistic missiles launched toward its capital, Riyadh. Authorities also thwarted a drone attack targeting a gas facility, highlighting the expanding geographical scope of the conflict.

Energy infrastructure across the Gulf region has increasingly become a focal point of military activity. Saudi Arabia’s SAMREF refinery located in the Red Sea port city of Yanbu was among the facilities targeted in an aerial attack. The refinery is jointly owned by Saudi Aramco and ExxonMobil. While oil loading operations at the port were temporarily disrupted following the attack, officials later confirmed that shipments had resumed.

Kuwait also reported damage to its energy infrastructure after a drone strike hit an operational unit at the Mina al-Ahmadi refinery. The refinery, operated by Kuwait Petroleum Corporation, experienced a limited fire as a result of the strike, though authorities said the situation was quickly brought under control.

The growing list of attacks on oil and gas facilities has heightened fears among market participants that the conflict could disrupt the steady flow of energy supplies from the Middle East. Even limited interruptions in production or shipping routes could significantly tighten global supply, given the region’s central role in meeting worldwide demand.

Energy traders are also closely monitoring developments around the Strait of Hormuz, a narrow waterway through which a large portion of the world’s oil shipments pass. Any sustained threat to shipping through the strait could trigger further price spikes and deepen global energy shortages.

In addition to its economic impact, the conflict is prompting a significant military response. Reports indicate that the U.S. administration is considering deploying thousands of additional troops to reinforce American operations across the Middle East. The move would aim to bolster security for regional allies and safeguard critical shipping routes and energy infrastructure.

As tensions continue to escalate, financial markets are bracing for further volatility. Rising oil prices are likely to feed into inflation, increase transportation and manufacturing costs, and place additional pressure on central banks that are already struggling to balance economic growth with price stability.

For now, energy traders and policymakers alike are watching closely for any signs that the conflict might expand further or begin to affect production capacity in the region. With several major oil and gas facilities already targeted, the risk of a deeper global energy crisis remains a growing concern.