Key Points:
- Brent crude briefly crossed $119 per barrel after new attacks on Middle Eastern energy infrastructure.
- Israel struck Iran’s massive South Pars gas field, sparking immediate retaliation.
- Iran attacked critical refineries and export terminals in Saudi Arabia, Kuwait, and the UAE.
- US Treasury Secretary Scott Bessent suggested removing sanctions on 191 million barrels of Iranian crude.
Global oil markets are completely panicking. Prices for crude oil held firmly above the $110 mark on Thursday morning. The market reacted to a massive new wave of escalatory military attacks between Israel and Iran that directly targeted critical energy infrastructure across the Persian Gulf.
The financial numbers show extreme volatility. Futures for Brent crude, the international benchmark, skyrocketed through Wednesday night. The price briefly crossed the terrifying $119 threshold for the second time since the war started before finally settling down around $112 per barrel. Meanwhile, the US benchmark, West Texas Intermediate, surged, then held steady at roughly $97 per barrel.
This recent wave of violence crossed a massive red line. Over the past 24 hours, both sides decided to directly attack energy facilities, marking a dangerous new height of escalation in the Middle East war.
The chaos started on Wednesday when Israel launched military strikes directly onto Iran’s South Pars gas field. This specific location is in the Iranian half of the world’s largest natural gas reserve, which Iran shares with Qatar. While reports suggest the United States knew about Israel’s attack plan, President Donald Trump aggressively denied having any prior knowledge of the strike in a recent Truth Social post.
Iran wasted no time striking back. Following the attack on South Pars, the Iranian government published a terrifying hit list of energy infrastructure located throughout the region and ordered immediate evacuations from those sites. In the hours since publishing that list, Iranian forces targeted the SAMREF refinery in Saudi Arabia, which is co-owned by Saudi Aramco and Exxon Mobil. They also knocked two gas facilities in the United Arab Emirates completely offline and successfully struck two major refineries located in Kuwait.
The most shocking target was Qatar’s Ras Laffan LNG export terminal, the world’s largest liquefied natural gas facility. QatarEnergy reported early Thursday morning that the terminal suffered “extensive damage” from the latest Iranian strikes. This massive hit adds to earlier damage that already forced the company to declare force majeure and halt all fuel shipments from the complex.
Energy analysts at Rystad Energy warned that the situation could easily get worse. They stated that if Iran successfully hits its full list of potential targets throughout the Gulf, global oil prices are very likely to smash the $120 per barrel mark. Brent crude already came within less than $1 of that devastating price point overnight.
The market only cooled down slightly on Thursday morning after some unexpected news from Washington. US Treasury Secretary Scott Bessent appeared on FOX News and suggested that the United States is seriously considering removing economic sanctions on Iranian crude oil that is currently sitting on ships. According to data from the energy intelligence firm Kpler, Iran currently has roughly 191 million barrels of oil floating at sea.
However, that extra oil might not be enough to fix the massive supply problem. Goldman Sachs estimated on Wednesday that the effective closure of the Strait of Hormuz has essentially stopped all tanker traffic. Even after accounting for some oil moving through regional pipelines, this shipping freeze has removed roughly 16.1 million barrels per day from the global supply chain.
The physical oil market shows even more stress than the futures market. Spot prices for Dubai and Oman crude oil grades surged to an unbelievable $166.80 per barrel on Thursday morning. Analysts suggest this massive price gap between real physical oil and “paper” futures contracts signals that a much steeper price climb is coming soon for the international Brent crude benchmark.
These direct strikes on energy infrastructure destroy any hope for a quick de-escalation. Analysts estimate that the physical damage to these refineries and export terminals is now so severe that it could take months or even years to repair the equipment and bring global energy flows back to normal.
