Oil rises amid attacks on energy infrastructure in Iran war

• Brent up 1%, WTI gains 0.1%
• Prices had spiked after Kharg Island attack
• Officials race to mitigate effects

Oil prices rose in early Monday trade as the Iran conflict continued to imperil global energy supplies in its third week and officials from around the world raced to mitigate cascading effects.

Brent crude futures gained 1.04 percent to $104.12 a barrel by 03:49 GMT, and US West Texas Intermediate crude was up 0.1 percent at $98.78 a barrel.

Both had been up about 3 percent as soon as trading opened in the US on Sunday evening after American forces bombed Iran’s primary oil export terminal on Kharg Island on Saturday. 

President Donald Trump told NBC News in an interview the strikes had “totally demolished” the island, but that the US may hit it again “just for fun”.

The Islamic Republic retaliated with a drone strike on the UAE port of Fujairah. By Sunday, sources told Reuters oil loading operations had resumed there to some extent.  

Iranian Foreign Minister Abbas Araghchi accused the UAE, specifically the emirates of Ras Al Khaimah and Dubai, of hosting the truck-based missile launchers from which the attack on Kharg Island originated, and said his country would respond in kind, according to the Wall Street Journal. 

UAE officials rejected the accusation. 

Kevin Hassett, who heads the White House’s National Economic Council, told CBS’s Face the Nation programme on Sunday the Pentagon’s estimate is for the war to run “four to six weeks” in total and that operations are “ahead of schedule”. 

US energy secretary Chris Wright similarly said on ABC News’ This Week that the conflict will “certainly come to an end in the next few weeks”. 

Wright also confirmed comments made by Trump on social media on Saturday by saying “a broad coalition of the nations of the world” should cooperate to reopen the Strait of Hormuz together.  

“All nations of the world depend on products that come from the Strait of Hormuz. China is top on that list,” Wright said. “Japan, Korea, all the Asian nations is where the energy — energy that comes out of the Strait of Hormuz flows to.” 

No confirmed attacks on vessels in and around the waterway have been logged by the International Maritime Organization or United Kingdom Maritime Trade Operations since March 12. 

Nevertheless, no commercial ship transited the strait on Saturday, the first full day of the conflict without any transmitted crossings either way, according to Windward, a maritime industry data platform.

India’s foreign minister S Jaishankar, however, told the Financial Times on Sunday that talks with Teheran had secured safe passage for two Indian-flagged gas tankers a day earlier.

Further reading:

• Mishal Kanoo: War won’t break Dubai’s economic model
• Iran war GPS jamming exposes shipping and consumer risk
• Middle East tourism losing $600m a day in Iran war

Amid continued disruptions to tanker passage through Hormuz and strikes on energy facilities across the Gulf, the International Energy Agency shared additional details on the record release of 400 million barrels of oil from strategic reserves its 32 member countries committed to on Wednesday.

The stocks “will be made available by IEA member countries in Asia Oceania immediately while stocks from IEA member countries in the Americas and Europe will be made available starting from the end of March”, the agency said. 

Spot gold fell 0.2 percent to $5,007.58 per ounce as of 02:40 GMT, while US gold futures for April delivery were down 1 percent at $5,011.10.

Financial markets in Saudi Arabia, Bahrain, Kuwait and Oman fell 0.1 percent, 0.5 percent, 0.1 percent and 0.4 percent, respectively, at the close on Sunday, their first trading day of the week. 

Qatar’s index rose 0.2 percent.