Oil
Oil prices surged more than 4% on Friday, reaching their highest levels in over a month as escalating hostilities between the US and Iran heightened fears of disruptions to global energy supplies. Brent crude settled at $88.10 a barrel and US West Texas Intermediate closed at $82.49, with both benchmarks posting weekly gains of around 16%.
The conflict intensified as the US struck infrastructure in Iran while Tehran launched attacks on US facilities across the region and targeted energy infrastructure in Kuwait. Concerns also grew over shipping after oil flows through the Strait of Hormuz declined sharply and Iran threatened to expand disruptions to the Red Sea. Saudi Arabia has diverted most of its crude exports to the Red Sea port of Yanbu to bypass the Strait of Hormuz, increasing volumes since the conflict began.
Gas
Asian spot LNG prices climbed for a fourth consecutive week to their highest level in nearly four months as escalating US-Iran hostilities renewed concerns over supply disruptions through the Strait of Hormuz. The benchmark price for September delivery to northeast Asia rose to $20.10 per million British thermal units.
The prolonged disruption has delayed expectations for the resumption of LNG flows through the Strait of Hormuz until October or November, while forecasts for global LNG market growth have been reversed. Strong summer cooling demand and reduced hydropower output continue to support prices across Asia.
European gas prices also strengthened as slower LNG imports raised concerns over replenishing storage ahead of winter. Although storage levels edged higher, lower import volumes and weaker injection rates continued to fuel uncertainty over Europe’s gas supply.
This article was supplied by the Abdullah bin Hamad Al-Attiyah International Foundation for Energy and Sustainable Development.
