Oil Prices Surge 4% after Iran Strikes Gulf Energy Facilities

Oil prices surged sharply on Wednesday amid escalating tensions in the Middle East, as Iran threatened attacks on key energy facilities in Saudi Arabia, the United Arab Emirates, and Qatar. 

The spike comes in the wake of Israeli strikes on Iran’s largest gas processing plant in Bushehr province.

Brent crude futures jumped more than 7%, surpassing $111 per barrel during trading. By settlement, Brent had climbed 3.83% to close at $107.38 per barrel, while U.S. crude stabilized at $96.32 per barrel.

Latest Oil Prices:

WTI Crude • 96.32 +0.11 +0.11%

Brent Crude • 109.5 +6.06 +5.86%

Murban Crude • 117.3 +6.35 +5.72%

Louisiana Light • 94.89 -5.09 -5.09%

WTI Midland • 102.2 +3.05 +3.08%

Opec Basket • 132.9 +3.88 +3.01%

Mars • 119.3 +3.08 +2.65%

Gasoline •  3.099 -0.025 -0.80%

Natural Gas • 3.065 +0.032 +1.06%

The market reaction reflects growing fears that attacks on Gulf energy infrastructure could further disrupt global supply. Tanker traffic through the strategically vital Strait of Hormuz, which handles roughly 20% of the world’s oil and liquefied natural gas trade, has already slowed significantly amid the ongoing U.S.-Israeli military campaign in Iran, now entering its third week.

Iranian authorities issued warnings of potential strikes on several high-profile facilities, including Saudi Arabia’s Samref refinery and Jubail petrochemical complex, the UAE’s Al Hosn gas field, and Qatar’s Mesaieed petrochemical plant. The Islamic Revolutionary Guard Corps (IRGC) described these sites as “legitimate and primary targets,” cautioning civilians to stay clear.

Market analysts fear that even a single armed incident, such as a missile strike or sabotage of a passing tanker, could ignite renewed instability in the already volatile region. Tony Sycamore, a market analyst at IG, told Reuters, “The risks remain high. One incident is enough to set the situation ablaze again.”

Federal Reserve Chair Jerome Powell warned that rising oil prices could fuel short-term inflation, though he noted it is “too early to quantify” the impact on the U.S. economy. The Fed maintained interest rates in the 3.5%–3.75% range, citing ongoing uncertainty from Middle East developments.

Meanwhile, President Donald Trump granted a two-month exemption from the Jones Act, which normally requires that goods transported between U.S. ports use American-flagged vessels. The move allows foreign ships to carry oil and petroleum products domestically, aiming to ease domestic fuel price pressures.

Citigroup analysts projected Brent could reach $120 per barrel in the coming days, with average prices potentially climbing to $130 per barrel in Q2 and Q3 if Gulf attacks persist and Hormuz remains closed. Their client note emphasized, “The market will continue to rise until a decisive event prompts the U.S. to end its military operation.”

The International Energy Agency has suggested that member countries release additional oil supplies on top of the 400 million barrels already agreed from strategic reserves to counter rising energy costs.

Israel confirmed plans to continue military operations in Iran for at least another three weeks, with overnight airstrikes targeting multiple locations across the country. Meanwhile, Iran reportedly requested India release three oil tankers seized in February, as part of discussions to secure safe passage for Indian-flagged vessels through the Strait of Hormuz.

The crisis has also sparked tensions with U.S. allies. Trump criticized Western partners for declining his call to escort tankers through Hormuz, accusing them of ingratitude despite decades of support.