FILE PHOTO: Tankers sail in the Gulf, near the Strait of Hormuz, as seen from northern Ras al-Khaimah, near the border with Oman’s Musandam governance, amid the U.S.-Israeli conflict with Iran, in United Arab Emirates, March 11, 2026. REUTERS/Stringer/File PhotoStringer/Reuters
Oil prices jumped to nearly US$110 a barrel on Wednesday as Iran attacked its Persian Gulf neighbours’ energy infrastructure in retaliation for U.S. and Israeli bombardments, some of which killed senior officials of the Islamic republic.
Iran has pledged to keep the Strait of Hormuz off-limits to most oil and liquefied-natural-gas tankers, and that has prompted a surge in oil prices since the United States and Israel began the war on Feb. 28. As much as 20 million barrels a day, about a fifth of the world’s oil, normally transits through the key waterway.
International benchmark crude oil jumped to within a whisker of US$110 a barrel during the session, before paring gains. Brent closed the trading session up nearly 4 per cent at US$107.38, representing an increase of about 50 per cent since the start of the war. West Texas Intermediate was up less than 1 per cent at US$96.32 a barrel.
Analysts have said prices are likely to march higher with no end in sight to the conflict, with some predicting crude to hit records. The effective closing of the Strait of Hormuz remains the major issue roiling energy markets, and last week’s announcement by the International Energy Agency (IEA) that members will release 400 million barrels of emergency stockpiles is seen as a temporary solution.
“We believe Iran could step up retaliatory attacks on select regional energy infrastructure in the coming days and weeks to push the Trump administration towards a peace agreement negotiation,” analysts at Bank of Nova Scotia said in a note to clients. “We think the next move of oil prices could potentially see Brent reaching $150-$200 per barrel in the coming two to three months.”
Iran’s South Pars gas field was struck on Wednesday in an escalation of the conflict. Facilities associated with the gas field near Asaluyeh on Iran’s Gulf coastline were ablaze, state media reported, and Iran vowed it would attack energy facilities in other Gulf countries in retaliation.
Qatar’s Interior Ministry said civil-defence personnel were dealing with a fire in the Ras Laffan area after an Iranian attack. The city is home to Qatar’s massive LNG production complex as well as an oil refinery.
Iran earlier issued an evacuation warning for several oil facilities across Saudi Arabia, the United Arab Emirates and Qatar, including Ras Laffan, saying they would be targeted by strikes “in the coming hours,” Iranian state media reported.
Prior to the Middle East conflict, Qatar was the world’s second-largest exporter of liquefied natural gas after the United States. But Qatar halted its production in early March after Iran attacked the Ras Laffan hub.
With the Strait of Hormuz closed to most marine traffic, LNG shipments from both Qatar and the UAE have been suspended.
“The sudden loss of about a fifth of global LNG supply is putting major strains on gas markets around the world,” the IEA said this week. Benchmark LNG spot prices for Asia-Pacific markets have soared 80 per cent in March.
Early Wednesday, Iranian Intelligence Minister Esmail Khatib was killed in an Israeli strike. A day earlier, Israel killed top Iranian security official Ali Larijani and the head of the paramilitary Revolutionary Guard’s Basij force, General Gholam Reza Soleimani.
Despite the runup in oil prices, President Donald Trump has mused about attacking Iran’s main oil export facilities on Kharg Island, after the U.S. launched strikes on military installations on the small Persian Gulf land mass.
Asian countries import the lion’s share of oil from the Gulf, and many of them are now scrambling to deal with shortages of refined products such as diesel and jet fuel, including restricting travel and shortening work weeks. The rest of the world faces economic fallout from the jump in energy costs.
The Bank of Canada and the U.S. Federal Reserve both opted to keep interest rates unchanged on Wednesday, saying the war in the Middle East and the global oil shock had raised the spectre of higher inflation and other economic uncertainties.
With reports from the Associated Press and Reuters