Oil prices spike as attacks on Middle East energy sites stoke fears

Oil prices have spiked as attacks on energy facilities in the Middle East have stepped up, heightening fears about major disruption to global supplies.

The price of Brent crude oil was rising by about 7% to cross 114 US dollars a barrel on Thursday morning.

This means it was closing in on the highest level since the conflict escalated at the end of February.

Prices were up sharply overnight after Qatar said on Thursday that Iranian missile attacks had hit its liquified natural gas field Ras Laffan, “causing sizeable fires and extensive further damage”.

This followed reports that Israel launched an attack against Iran’s South Pars gas field.

US President Donald Trump said he “knew nothing” of Israel’s strike and that he did not want to authorise “this level of violence and destruction”.

But he also pledged to “massively blow up the entirety” of Iran’s South Pars gas field if the nation attacks Qatar’s facilities again.

Qatar’s state-backed energy company Qatar Energy had halted production of liquefied natural gas at its sites at the beginning of the month because of attacks on its facilities.

European benchmark natural gas prices were also surging by about 20% on Thursday morning.

Kathleen Brooks, research director at XTB, said the escalation in the conflict was “spooking the market” and traders were predicting “hefty losses for stocks” when stock markets open.

“This war looks far from over, and the energy crisis is shifting from a shipping crisis to a supply crisis,” she said.

“If Iran is targeting energy assets in the region, then the conflict gets more serious and the repercussions for a long-term energy price shock also start to play out in financial markets.”

She added that despite Mr Trump’s calls for Israel and Iran to stop targeting energy sites, “it will take a lot of positive sentiment and news flow to calm energy prices today”.