Oil prices rose about 15% on Monday to their highest point since July 2022 as rising tensions between the United States, Israel and Iran prompted major Middle Eastern producers to cut output. Reuters.
Iraq and Kuwait have cut their oil production and increased the shortfall in liquefied natural gas (LNG) exports from Qatar.
Early on Monday, Brent crude futures rose by $15.51, or 16.7%, to $108.20 per barrel (bbl), while U.S. West Texas Intermediate (WTI) crude futures rose $14.23, or 15.7%, to $105.13/bbl.
The spill also disrupted shipping through the Strait of Hormuz, which carries about 20 percent of the world’s daily oil, prompting some refineries to suspend operations and tighten regional supplies.
The United Arab Emirates (UAE) and Saudi Arabia also need to reduce production soon due to limited storage capacity.
The conflict poses the risk of prolonged high oil prices globally as supply chains grapple with issues such as damaged infrastructure and shipping risks.
Iraq’s southern oil fields experienced a significant drop in production, which fell by 70% to 1.3 million barrels per day (mbbl/d). This is due to export restrictions through the Strait of Hormuz, the news agency quoted three industry sources as saying.
Last Saturday, the Kuwait Petroleum Corporation began cutting oil production and announced a force majeure for its shipments without specifying the extent of the production cuts.
Meanwhile, Iran has continued its attacks on oil infrastructure in the region.
Last week, a fire was reported in the Fujairah oil field in the United Arab Emirates, caused by falling debris, although no one was injured.
The Ministry of Defense of Saudi Arabia has said that it targeted an unmanned aircraft in the Sheba oil field.
Over the weekend, fireballs and plumes of smoke were seen in Tehran following coordinated airstrikes as part of Operation Epic Fury. Oil storage facilities in the Iranian capital were attacked by Israeli and American forces Al Jazeera.
The attacks damaged a number of important facilities, including the Aghdasiya oil warehouses in the northeast of Tehran, the Tehran refinery in the south, the Shahran oil depot in the west, and another depot in Karaj.
Eyewitnesses saw that fuel from Shahran’s depot spilled into the surrounding streets.
The publication also reported that the Iranian Oil Distribution Company, the National Iranian Oil Production Company, said that four of their employees were killed in the attacks.
At the same time, US President Donald Trump said that the war can end only when Iran’s military and ruling rulers are defeated.
Oil Production
