Oil and gas prices surge after Iran attacks major Qatari plant

Brent crude jumped 5 per cent to US$112.75, while natural gas jumped 5.6 per cent Read more at straitstimes.com.

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LONDON – Oil and European natural gas prices surged for a second day after Iran carried out an attack on a major LNG site in Qatar, one of several energy assets it pledged to target following strikes on the Islamic Republic’s giant South Pars gas field.

Global oil benchmark Brent crude jumped 5 per cent to US$112.75 as at around 10am Singapore time on March 19. Brent earlier climbed 3.8 per cent to settle at US$107.38 on March 18. The US benchmark, West Texas Intermediate, rose 2.7 per cent to US$98.95.

Natural gas jumped 5.6 per cent. European gas contracts have already risen more than 70 per cent since the Iran war began on Feb 28, while Asian LNG futures have surged 88 per cent. Gas contracts the US, which as a major exporter is typically shielded from global price swings, have climbed 5.7 per cent.

Oil has surged about 50 per cent since the start of the war on Feb 28, choking off the Strait of Hormuz to shipping and slashing a swath of oil and gas production. However, Iran’s upstream energy industry had been largely spared until now, helping to contain the prospect of an escalation that could have a bigger impact on longer-term supply.

“The market is still underestimating and not fully pricing the risk of how quickly this could escalate into direct hits on wider Gulf energy infrastructure,” said Haris Khurshid, chief investment officer at Karobaar Capital “If this escalates into direct hits then US$120 won’t be the ceiling, it’ll be the starting point. To see US$140 to US$160 won’t be crazy at all,” he added, referring to Brent prices.