Oil nears $110 a barrel After Major Gas Field in Iran Is Hit
AP Photo/Vahid Salemi, File
Oil markets surged on Tuesday following accusations from Iran that Israel carried out a strike on a key gas facility, prompting Tehran to warn that energy infrastructure in neighboring Gulf states could become targets. Brent crude prices climbed more than 6%, reaching just under $110 per barrel, while natural gas prices also rose about 6% as traders reacted to reports that Iran’s South Pars gas field had been hit, according to Bloomberg. Iran’s Islamic Revolutionary Guard Corps later issued a list of what it called “direct and legitimate” retaliation targets located in Saudi Arabia, the United Arab Emirates, and Qatar, all countries that maintain connections with the United States.
The reported strike on South Pars is believed to be the most significant attack on an energy facility since the conflict began, according to the New York Times, though the full extent of the damage was not immediately known. Iran shares the massive gas field with Qatar, which condemned the strike and described it as a “dangerous and irresponsible step” by Israel that could threaten global energy security. The United Arab Emirates also criticized the attack, the Wall Street Journal reported. South Pars contains roughly one-third of the world’s natural gas reserves. Florence Schmit, an energy strategist at Rabobank, told Bloomberg that the latest developments are shifting attention back to the physical risks facing global energy supplies, warning that ongoing disruptions are tightening available supply each day.
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