Oil prices rose on Thursday, with benchmark Brent rising as much as $5 a barrel, after Iran attacked energy facilities across the Middle East following a strike on the South Pars gas field, a major escalation in the war with the United States and Israel.
Brent futures were up $4.66, or 4.3%, at $112.04 a barrel by 0400 GMT, after an earlier rise of more than $5 to $112.86 a barrel.
US West Texas Intermediate crude rose 96 cents, or 1%, to $97.28 a barrel, after having risen over $3. Brent closed up 3.8% on Wednesday, while WTI settled nearly flat.
WTI has been trading at its widest discount to Brent in 11 years due to releases from US strategic reserves and higher freight costs, while renewed attacks on Middle Eastern energy facilities boosted support for Brent.
“Escalation in the Middle East, precise attacks on oil infrastructure, and the death of Iranian leadership all point to a prolonged disruption in oil supplies,” Phillip Nova analyst Priyanka Sachdeva said in a note.
“Adding fuel to the fire, the Federal Reserve served ‘steady rates’ with a hawkish narrative, pointing to the economic concerns that follow a war.”
The US central bank held interest rates steady on Wednesday, projecting higher inflation as policymakers take stock of the impact of the US-Israel war with Iran.
On Wednesday, QatarEnergy said Iranian missile attacks on Ras Laffan, the site of Qatar’s core LNG processing operations, caused “extensive damage” to its energy hub.
