News

Oil and Gas Prices Surge as Iran Targets Production Facilities

Middle East conflict deepens, disrupting supply and raising global energy concerns

Written By : Akshita Pidiha
Reviewed By : Sankha Ghosh

The ongoing conflict involving Iran, the United States, and Israel has led to significant increases in global oil and gas prices. Brent crude oil has reached $103 per barrel, marking a 3% increase. Current prices are nearly 50% higher than they were before the war began on February 28. Additionally, gas prices have risen substantially across all markets worldwide.

First Direct Attacks on Production

For the first time, Iran has targeted oil and gas production facilities instead of just storage or transport hubs. A major drone strike hit the Shah gas field in the United Arab Emirates, causing a fire and stopping operations. This field is one of the largest in the world.  

Key Locations Under Attack

Several important energy sites have been affected. The Majnoon oilfield in Iraq and the Fujairah port in the UAE were also attacked. Fujairah serves as a crucial export hub, processing more than 1 million barrels of oil each day. Oil loading operations have ceased due to existing damage and safety concerns.

Strait of Hormuz Impact

The crisis has also affected the Strait of Hormuz, a vital route for global oil and gas supply. Nearly 20% of the world’s oil passes through this narrow channel. Disruptions here have limited exports and increased pressure on global markets.  

Global Effects and Energy Shortage

Countries throughout Asia face energy shortages. Sri Lanka, Bangladesh, and Thailand have implemented fuel conservation measures. The organization will implement planned power cuts, reduced working days, and energy-saving measures.

Market Outlook 

Experts warn that refined fuels such as diesel and jet fuel will face greater shortages than crude oil. The ongoing attacks, together with market uncertainty about the war's duration, maintain the current market instability. 

The ongoing war poses significant risks to global energy resources. The price of goods will increase if supply interruptions persist. The coming weeks will bring additional shortages and economic challenges for countries.

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