Oil prices surged on Thursday as conflict in the Middle East escalated, sending markets into volatility. Benchmark Brent crude oil rises by as much as $5 a barrel following Iranian attacks on energy facilities.
Brent futures increased $4.66, or 4.3%, reaching $112.04 a barrel by early Thursday, after an earlier spike to $112.86. U.S. West Texas Intermediate (WTI) crude also climbed 96 cents, or 1%, to $97.28 a barrel, following gains of more than $3.
The spike comes after Iran retaliated for an Israeli strike on the South Pars gas field, one of the world’s largest natural gas reserves shared with Qatar. QatarEnergy reported that Iranian missiles caused “extensive damage” at the Ras Laffan LNG hub.
Saudi Arabia intercepted four ballistic missiles aimed at Riyadh, while attempted drone attacks on gas facilities were also reported. Iran had issued evacuation warnings ahead of its strikes on oil and energy facilities across Saudi Arabia, Qatar, and the UAE.
Analysts say the situation has disrupted oil supply expectations. “Escalation in the Middle East and precise attacks on oil infrastructure indicate prolonged disruption,” said Priyanka Sachdeva, analyst at Phillip Nova.
The conflict coincides with economic pressures from the U.S. Federal Reserve, which held interest rates steady while signaling concerns over inflation. These factors, combined with geopolitical instability, are adding upward pressure on oil prices.
Markets also reacted to the U.S. considering deployment of troops to secure oil tanker routes through the Strait of Hormuz. Analysts warn that ongoing regional tensions could continue to support oil prices in the near term.
WTI has been trading at its widest discount to Brent in 11 years due to U.S. strategic reserves releases and higher shipping costs. Meanwhile, Brent continues to reflect global supply concerns amid attacks on key energy hubs.
Experts predict that oil rises could persist as Iran’s strikes on Middle Eastern facilities continue, with no immediate sign of de-escalation or reopening of strategic shipping lanes.
The combination of military conflict, disrupted energy infrastructure, and economic uncertainty is expected to keep Brent and WTI prices elevated, with analysts monitoring the region closely.
The market remains highly sensitive, as further escalation could cause more rapid oil rises and volatility in global energy markets.
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