By Youssef Saba and Ahmed Alayum
LONDON, March 3 (Reuters) – Global oil and gas prices rose on Tuesday as a U.S.-Israeli war against Iran halted energy exports from the Middle East, with Tehran attacking ships and energy facilities, blocking shipping in the Gulf and halting production from Qatar to Iraq.
Benchmark Brent crude futures settled up $3.66, or 4.7%, at $81.40 a barrel, the highest settlement since January 2025. European gas prices rose 40% before paring gains, adding to Monday’s 40% gain. The prices of sugar, mustard and soybeans have also increased.
The war risks fueling rising inflation that could derail economic recovery in Europe and Asia if the war drags on in a region that produces only a third of the world’s oil and nearly a fifth of its natural gas. The price hike could also pose a political threat to US President Donald Trump and his Republicans in November’s midterm elections.
Trump said the U.S. Navy could begin transporting oil tankers through the Strait of Hormuz if needed, adding that he had ordered the U.S. International Development Finance Corporation to provide political risk insurance and financial guarantees for maritime trade in the Gulf. It was one of the administration’s most drastic moves to try to stem rising energy prices as conflicts escalate in the Middle East.
Iraq, OPEC’s second-largest producer, said it would be forced to cut production by more than 3 million barrels a day within days if oil tankers could not move freely to loading points, according to two Iraqi officials.
As of Tuesday, Iraq had cut 700,000 bpd from the Rumila oil field and 460,000 bpd from the West Qurna 2 field, officials said.
Shipping has stagnated, oil and gas production has declined
Transport through the Strait of Hormuz was effectively shut down for a fourth day after Iran attacked five ships, blocking the artery supplying about 20% of the world’s oil and LNG.
According to Vortexa ship tracking data, oil tanker transit through the strait dropped to four vessels on March 1, a day after the war began, for an average of 24 per day since January. Three of the four were Iranian-flagged.
Hundreds of tankers loaded with oil and LNG are stranded near major hubs such as the UAE’s Fujairah port, unable to reach customers in Asia, Europe and elsewhere.
Some companies are looking for alternative ways.
Saudi oil giant Aramco 2223.SE is trying to get some crude to the western Red Sea port of Yanbu, but sources, including buyers, traders and analysts, said Aramco’s east-west pipeline has limited capacity and could be targeted by Iran’s allies.
