Oil prices moved notably higher after a wave of Iranian strikes targeted energy infrastructure across the Gulf, marking a significant escalation in tensions linked to Tehran's confrontation with the United States and Israel. By 0142 GMT, Brent futures were trading up $3.69, or 3.44%, at $111.07, while U.S. West Texas Intermediate rose $2.29, or 2.38%, to $98.61.
The upward move followed a rally on Wednesday when Brent closed up 3.8% and WTI finished nearly flat. Traders have been pricing in a premium for Brent amid renewed attacks on Middle Eastern energy facilities, while U.S. crude has been under additional pressure from policy measures that have increased supply flows and higher freight costs.
Market commentary highlighted that WTI is trading at its widest discount to Brent in 11 years. Analysts attribute the gap in part to releases from U.S. strategic petroleum reserves and the impact of elevated shipping costs on netback values for overseas grades.
The strikes included hits on Qatar's LNG hub at Ras Laffan. QatarEnergy said Iranian missile attacks on Ras Laffan, the site of Qatar's core LNG processing operations, caused "extensive damage" to the energy complex. In the United Arab Emirates, authorities shut down some operations after incidents at the Habshan gas facilities and the Bab oil field that were caused by falling debris from intercepted missiles. Saudi officials reported intercepting and destroying four ballistic missiles launched toward Riyadh and an attempted drone attack on a gas facility.
Iran gave evacuation warnings in advance of its actions for several oil facilities across Saudi Arabia, the UAE and Qatar, stating the strikes were a retaliation for earlier attacks on its own infrastructure at South Pars and Asaluyeh. South Pars is the Iranian sector of the world’s largest natural gas deposit, which Iran shares with Qatar on the other side of the Gulf.
Market strategists said the fresh barrage of strikes has reinforced support for oil prices as regional tensions deepen. Tina Teng, a market strategist at Moomoo ANZ, said oil prices are likely to remain supported as Iran’s new strikes on Middle Eastern energy infrastructure heighten the regional risk profile, with no signs of de-escalation or any near-term reopening of the Strait of Hormuz.
Separately, Reuters reported that the U.S. administration is considering the deployment of thousands of U.S. troops to bolster its operations in the Middle East as it prepares further steps in its campaign against Iran. Options under consideration include providing safe passage for oil tankers through the Strait of Hormuz - an effort that would primarily involve air and naval forces - though securing the Strait could also entail deploying U.S. ground forces, according to sources cited in the report.
Higher prices reflect a combination of immediate physical disruption to regional energy sites and the broader geopolitical uncertainty that influences traders' assessments of future supply risks. The Brent-WTI spread, recent strategic reserve releases, freight dynamics and ongoing attacks have together shaped market pricing over the last sessions.
Context and implications
The recent attacks have directly affected key energy-processing infrastructure in Qatar, and caused operational interruptions in the UAE and defensive responses in Saudi Arabia. Those developments have been sufficient to move global benchmark prices higher as market participants weigh the potential for sustained disruptions to oil and gas flows out of the Gulf.