Oil rallies above $110/bbl as Iran continues targeting Gulf countries

Brent crude’s price has paced higher as the Middle East conflict has continued escalating over the week.

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Vessel movement through the Strait of Hormuz is still under major threat, according to recent reports by the United Kingdom Maritime Trade Operations (UKMTO) agency.

Earlier today, the UKMTO reported that a vessel, 4 nautical miles (NM) east to Qatar’s Ras Laffan port near the Strait of Hormuz, caught fire after being hit by an unknown projectile.

Brent’s price has risen following the developments and a series of incidents affecting energy infrastructure across the Gulf, as Iran targeted them in response to Israeli strikes on Iran’s South Pars gas field, market analysts said.

“Strikes on Iranian energy assets yesterday have Iran retaliating by striking energy infrastructure in neighbouring Gulf countries,” two analysts from ING Bank noted.

Saudi Arabia’s oil firm Aramco's SAMREF refinery in ‌the Red Sea port of Yanbu was also struck in a missile attack earlier today, Reuters reported. The de-facto OPEC leader intercepted and destroyed four ballistic missiles launched toward Riyadh, the report added.

Iranian missiles have struck the Ras Laffan industrial complex in Qatar – one of the world’s largest LNG facilities. The missile attacks caused “extensive damage,” state-owned energy company QatarEnergy stated.

“Several of its Liquefied Natural Gas (LNG) facilities were the subject of missile attacks, causing sizeable fires and extensive further damage,” QatarEnergy said.

The UAE suspended operations at its Habshan gas facility after a drone interception, as debris affected energy infrastructure, Reuters reported.

With no promising signs of de-escalation, upward pressure on Brent is likely to persist, according to market analysts.

“Supply risks continue to grow in energy markets amid an escalation in attacks on Persian Gulf energy infrastructure,” ING Bank analysts added.

By Aparupa Mazumder

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