Oil prices rise over 3 percent as Iran conflict widens

Global energy markets surged as the escalating conflict involving the United States, Israel, and Iran severely disrupted shipping lanes and production. Brent Crude Oil climbed 3.2% to $84.04 per barrel, while West Texas Intermediate rose 4.5% to $78.01. This marks the fifth consecutive session of gains as supply tightness becomes increasingly evident in global markets. UBS analyst Giovanni Staunovo noted that the market is reacting to multiple pressures. > "Renewed attacks on tankers in the Gulf, along with Chinese measures to reduce fuel exports, pushed prices higher." In response to the widening regional instability, several oil refineries across China and India have shuttered crude units. The strain on refined products has pushed European diesel futures to their highest levels since late 2022. Shipping has also faced direct threats; the Bahamas-flagged tanker Sonangol Namibe reported hull damage following an explosion near an Iraqi port. Natural gas markets are also under pressure. Russia has warned of potential halts to remaining gas flows to Europe, while Qatar declared force majeure on liquefied natural gas shipments. In the Netherlands, gas prices at the Dutch TTF hub rose nearly 3% on Thursday, contributing to a 60% increase since the previous Friday. The military situation intensified as Iran launched missile strikes against Israel, forcing millions into shelters. This followed a naval engagement where a U.S. submarine sank an Iranian vessel off the coast of Sri Lanka. Additionally, NATO defenses intercepted a ballistic missile aimed at Turkey. Analysts warn that a prolonged closure of the Strait of Hormuz could remove millions of barrels from the market. Iraq has already reduced its output by 1.5 million barrels per day due to storage limitations and the lack of viable export routes. Similar supply risks are mounting for Kuwait if the maritime chokepoint remains impassable.