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BANGKOK (AP) — Global oil and natural gas prices soared Thursday after Iran attacked a key natural gas facility in Qatar that can supply one-fifth of the worlds gas as well as two oil refineries in Kuwait.
The attacks added to fears the energy crisis triggered by the closure of the Strait of Hormuz to tanker traffic may be longer and more extensive than feared, with lasting damage to oil and gas production.
Brent crude, the international benchmark, rose to near $114 per barrel, up from under $73 per barrel on the eve of the war.
The European TTF benchmark for natural gas prices traded 24% higher on Thursday.
The Iranian attack hit the Ras Laffan terminal for shipping out liquefied natural gas in Qatar. Qatar normally supplies some 20% of the world’s consumption of LNG, which can be carried by ship. The facility shut down after a drone attack. The closure of the Strait of Hormuz to most tanker traffic has left the gas with nowhere to go.
World shares retreated after stocks on Wall Street slumped as oil prices resumed their climb.
U.S. stocks also sagged due to a report that said inflation was primed to worsen even before the war with Iran sent oil and gas prices spiking. That, and comments from the head of the Federal Reserve, led investors to expect there’s less chance of getting the lower interest rates that they crave.
U.S. futures were little changed, while Treasury yields pushed higher, lending still more strength to the U.S. dollar, which has gained against other major currencies since the war began.
Oil prices have soared because the war has disrupted the Persian Gulf’s energy industry.
Iran is intensifying its attacks on its Gulf Arab neighbors’ energy infrastructure as it hits back following an Israeli attack on its main natural gas field.
If the disruptions keep oil and gas prices high for long, they could create a debilitating wave of inflation for the global economy.
U.S. benchmark crude oil gained 1.1% to $96.45 a barrel early Thursday, while the Henry Hub future contract, the benchmark for U.S. natural gas, gained 3.3%.
In Asian share trading, Tokyo’s Nikkei 225 fell 3.4% to 53,372.53 as the Bank of Japan opted to keep its benchmark interest rate on hold at 0.75%, citing the war with Iran as one factor.
In its monetary policy statement the BOJ said that “in the wake of increased tension in the Middle East, global financial and capital markets have been volatile and crude oil prices have risen significantly; future developments warrant attention.”
Higher oil prices are a heavy burden for Japan, which like South Korea and Taiwan depends on imports of most raw materials for industries that rely heavily on oil and its derivatives.
