LONDON: Although major oil and gas infrastructure and flows have so far been spared any significant effect, oil prices increased on Tuesday due to growing interruptions from the Iran-Israel war. At 12:23 p.m. Saudi time, Brent crude futures increased $1.23, or 1.7%, to $74.46 a barrel. At $72.85, US West Texas Intermediate crude was up $1.08, or 1.5%. Earlier in the trading day, both futures increased by over 2 percent, although they also saw dips before recovering in erratic trading.
Iran temporarily halted gas production at the South Pars gas field, which it shares with Qatar, after an Israeli strike triggered a fire there on Saturday, but there was no discernible disruption in oil shipments. Israel also attacked Iran’s Shahran oil storage. According to analyst Ole Hansen of Saxo Bank, “the market is largely worried about disruption through (the Strait of) Hormuz, but the risk of that is very low.”
Since Iran would lose money and the US wants lower oil prices and lower inflation, there is no interest in blocking the canal, Hansen added. The dangers to businesses transporting gasoline and oil in the area were brought to light Tuesday when two oil tankers crashed and caught fire close to the Strait of Hormuz, where electronic interference has increased. There are indications that oil supplies are still plenty despite the possibility of interruptions and the likelihood of decreased demand.
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