Oil prices fell nearly 15% on Monday to their highest level since July 2022 as rising tensions between the US, Israel and Iran prompted major Middle East producers to cut production, reports said. Reuters.
Iraq and Kuwait cut their oil production, reinforcing the current decline in liquefied natural gas (LNG) imports from Qatar.
Early Monday, Brent crude futures were up $15.51, or 16.7%, to $108.20 per barrel (bbl), while US West Texas Intermediate (WTI) crude futures were up $14.23, or 15.7%, to $105.13/bbl.
The increase has also disrupted shipping through the Strait of Hormuz, which carries about 20% of the world’s daily oil supply, prompting some refineries to halt operations and tighten regional supplies.
The United Arab Emirates (UAE) and Saudi Arabia may soon have to reduce their production due to limited storage capacity.
The conflict poses the risk of prolonged global fuel price hikes as supply chains face problems such as damaged infrastructure and increased shipping accidents.
Iraq’s southern oil fields experienced a sharp decline in production, down 70% to 1.3 million barrels per day (mbbl/d). This is due to export restrictions through the Strait of Hormuz, according to three industry sources quoted by the news agency.
Last Saturday, the Kuwait Petroleum Corporation began cutting oil production and declared force majeure for its exports without specifying the extent of the production cuts.
Meanwhile, Iran has continued its attacks on the region’s oil infrastructure.
Last week, a fire was reported at the UAE’s Fujairah oil field caused by falling debris, although no injuries were reported.
Saudi Arabia’s Ministry of Defense said on X intercepted a pilot plane headed for the Shaybah oil field.
Over the weekend, fireballs and thick clouds of smoke were seen over Tehran following coordinated airstrikes as part of Operation Epic Fury. Gasoline depots in the Iranian capital were attacked by Israeli and American forces, reports said Al Jazeera.
The strikes hit several key facilities including the Aghdasieh oil depot in northeast Tehran, the Tehran refinery in the south, the Shahran oil depot in the west and another depot in Karaj.
Witnesses saw that oil from the Shahran depot had spilled onto the surrounding roads.
The publication also reported that Iran’s oil distribution company, the National Iranian Oil Products Distribution Company, said four of its employees were killed in the attack.
Meanwhile, US President Donald Trump commented that the conflict could end only when the Iranian military and the ruling authorities are defeated.
On Sunday, Mojtaba Khamenei was named as the successor to his father Ali Khamenei as Supreme Leader of Iran, maintaining tight control in Tehran.
“Oil prices rise 15% as Strait of Hormuz disruption tightens supply” was originally created and published by Offshore Technology, a product owned by GlobalData.
The information on this site is provided for general information purposes only. It is not intended to be advice on which you should rely, and we make no representation, warranty or guarantee, either express or implied as to its accuracy or completeness. You should obtain professional or expert advice before taking, or refraining from, any action on the basis of the content on our site.
