Oil Prices Surge After Iran Targets Energy Facilities Following Israeli Strike

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 rose $6.84, or 6.37 percent, to $114.20 a barrel by 4:21 p.m. Saudi time, after earlier climbing more than $11 to reach $119.13, approaching the three-and-a-half-year high recorded on March 9. U.S. West Texas Intermediate (WTI) crude increased 56 cents, or 0.58 percent, to $96.88 a barrel, following an earlier jump of nearly $4 to $100.02. WTI is currently trading at its widest discount to Brent in 11 years.

Middle East benchmarks Dubai and Oman reached record premiums of around $65 per barrel, according to trade sources and Reuters data, reflecting tight regional supply and heightened risk perceptions.

The surge in prices comes amid ongoing geopolitical tensions and concerns over global energy security. The U.S. central bank kept interest rates unchanged on Wednesday while projecting higher inflation as policymakers assess the impact of the regional conflict. Rising fuel costs have become a political issue in Washington ahead of the November elections. Treasury Secretary Scott Bessent said the United States may soon remove sanctions on approximately 140 million barrels of Iranian oil stranded on tankers to ease supply pressures.

The latest escalation follows Israel’s attack on the South Pars gas field, Iran’s portion of the world’s largest natural gas deposit, which it shares with Qatar. President Donald Trump said the U.S. and Qatar were not involved in the Israeli strike. He warned that Israel would not strike the field again unless Iran attacked Qatar and indicated that the U.S. would respond if Iran targeted Doha.

Iranian missile strikes on Ras Laffan in Qatar, home to QatarEnergy’s core LNG facilities and the world’s largest liquefied natural gas plants, caused “extensive damage,” according to QatarEnergy. The assault also impacted Shell’s Pearl gas-to-liquids plant, which produces 140,000 barrels per day, halting output. The disruptions sent European gas prices soaring to their highest levels in more than three years, raising concerns about energy supply ahead of the northern hemisphere’s spring demand peak.

Analysts say the attacks and counter-attacks underscore the fragility of energy infrastructure in the region and the potential for volatility in global markets. Brent crude has been especially sensitive to geopolitical shocks, given the Middle East’s pivotal role in oil and gas production.

Investors are closely monitoring the situation, with focus on whether the conflict will expand and how regional powers, including Qatar, Saudi Arabia, and the United States, respond. The combination of physical disruptions, geopolitical risk, and political pressures on energy policy has created a volatile environment for oil and gas markets worldwide.