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Middle East conflict threatens oil export facilities Oil prices may rise further
Overseas Chinese News International oil prices are likely to continue rising on Monday as the war between the United States and Israel against Iran enters its third week and the market is worried about risks to Middle East oil infrastructure.
According to Reuters, the International Energy Agency said on Sunday that it will soon release more than 400 million barrels of oil reserves to the market to cope with the surge in oil prices caused by the war in the Middle East. It would be the largest reserve release on record. The agency said stocks from Asia and Oceania will be available on the market immediately, while stocks from Europe and the Americas will be available by the end of March.
Affected by the conflict, Brent crude and U.S. West Texas Intermediate futures have risen more than 40% so far this month to their highest levels since 2022. Previously, Tehran stopped oil shipments through the Strait of Hormuz after the United States and Israel launched attacks on Iran. The strait is a key waterway for about one-fifth of the world’s oil supply.
US President Donald Trump has urged allies to deploy warships to help secure the strategic passage.
Trump also threatened to launch more strikes against Iran’s oil export hub on Kharg Island. The United States carried out attacks on military targets there on Saturday. Iran responded strongly, saying it would retaliate further.
Shortly after the attack, an Iranian drone hit a key oil terminal in Fujairah, United Arab Emirates.
JPMorgan analyst Natasha Kaneva said this marked an escalation in the conflict. In addition to Fujairah in the United Arab Emirates, Saudi Arabia’s Ras Tanura export terminal and Abqaiq oil processing facility are also listed as critical and highly vulnerable energy facilities in the Gulf region, JPMorgan analysts said.
An industry source based in Fujairah told Reuters on Sunday that local oil loading operations had resumed.
Fujairah is located outside the Strait of Hormuz and is one of the export channels for the UAE’s flagship crude oil variety, Murban. It exports about 1 million barrels per day, equivalent to about 1% of global demand.
The International Energy Agency said global oil supply is expected to fall by 8 million barrels per day in March due to shipping disruptions, while output from Middle East oil-producing countries has fallen by at least 10 million barrels per day.
U.S. Energy Secretary Chris Wright said on Sunday he expected the war with Iran to end “in the next few weeks,” after which oil supplies would resume and energy costs would fall.
Meanwhile, the Trump administration has rebuffed efforts by Middle East allies to launch diplomatic talks, while Iran has said it will not consider a ceasefire until the United States and Israel halt strikes, three sources familiar with the effort said, dimming hopes of a near-term end to the conflict.
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