Oil nears $110 a barrel after gas field strike

Source: Hacker News

Oil prices jump after Iranian airstrike on South Pars facility

Oil prices leapt to nearly $110 a barrel after Iranian media reported an airstrike hitting a facility on the world’s largest natural gas field.

Facilities on the South Pars gas field pictured in 2016

The Brent crude oil benchmark hit $109.91 a barrel just after 14:30 GMT, more than 5 % higher than Tuesday’s prices, and it remains above $108. The benchmark UK gas price also jumped by 6 % to 143.53 p/therm before falling back below the 140 p mark.

While the price of both oil and gas spiked, they remained below the highs seen earlier in the conflict:

• Oil reached $116.78 a barrel on 9 March.
• UK gas hit 162.55 p/therm on 3 March.

Iran’s oil ministry said a fire at the petrochemical complex was under control on Wednesday afternoon, but the extent of the damage remained unclear.

“As previously warned, if the fuel, energy, gas, and economic infrastructures of our country are attacked by the American‑Zionist enemy, in addition to a powerful counter‑attack against the enemy, we will severely strike the origin of that aggression as well,” the military said in a statement published by Tasnim.
”We consider targeting the fuel, energy, and gas infrastructures of the countries of origin legitimate and will retaliate strongly at the earliest opportunity.”

Qatar also operates facilities on the gas field, which it calls North Dome. The country, which produces a fifth of the world’s liquefied natural gas, halted production earlier in March in response to the conflict. Qatar’s foreign ministry spokesman Majed Al Ansari said strikes against energy infrastructure “constitutes a threat to global energy security.”

Energy markets will likely remain volatile

AJ Bell’s head of financial analysis, Danni Hewson, said the attack and Iran’s retaliation had “helped dial up the temperature once again and put renewed upward pressure on oil prices.”

“Any solution to the blockage of the Strait of Hormuz looks pretty distant at this point and unless—and until—there is progress on that front, energy markets will likely remain volatile,” she added.

The White House responded to the rising oil price by suspending the Jones Act—a 1920 law that restricts transport between U.S. ports to American‑made ships.

U.S. Press Secretary Karoline Leavitt said the 60‑day waiver will allow “vital resources like oil, natural gas, fertiliser, and coal to flow freely” as non‑American‑made ships can now be used. Maritime groups in the U.S. noted the effect would be minimal, emphasizing that oil prices, not shipping costs, are driving higher pump prices.

Meanwhile, Iran has also suspended the flow of gas to Iraq in response to the attack, aiming to shore up domestic supplies, according to a senior Iraqi official. The vast majority of Iran’s gas supply—94 %—is used domestically, per data from the Gas Exporting Countries Forum.