WEB DESK: Oil and financial markets faced renewed turbulence on Thursday as escalating tensions in the Gulf triggered a sharp rise in energy prices and intensified fears of a broader economic fallout.
Brent crude jumped more than 5%, climbing above $113 per barrel after Iran warned it could expand attacks on regional energy infrastructure. The threat followed an Israeli strike on facilities linked to the विशाल South Pars Gas Field, a critical gas reserve jointly shared with Qatar.
Missile strikes by Iran hit Ras Laffan Industrial City the world’s largest liquefied natural gas hub causing significant damage and raising concerns about global supply disruptions. In response, European gas prices surged by over 30%.
U.S. President Donald Trump said Washington had no prior knowledge of the Israeli strike but insisted that no further attacks would take place if Iran halted its actions against Qatar. He warned, however, that failure to de-escalate could result in severe retaliation against Iran’s energy infrastructure.
The situation also impacted neighboring United Arab Emirates, where a gas facility in Abu Dhabi was shut down after debris from intercepted missiles fell in the area, underscoring the widening regional risks.
Meanwhile, the International Atomic Energy Agency reported that a projectile struck near Iran’s only operational nuclear power plant, though no damage was recorded.
Iran’s Revolutionary Guards issued a stern warning, saying further attacks on its energy infrastructure would trigger sustained retaliation against regional energy facilities and allied interests.
The conflict has significantly disrupted flows through the Strait of Hormuz, a vital route for roughly one-fifth of global oil and gas supplies, amplifying concerns about a prolonged energy shock.
Rising fuel costs have heightened fears of another wave of inflation, potentially forcing central banks to maintain or increase interest rates. Recent data showing higher-than-expected U.S. wholesale inflation has added to these concerns.
Jerome Powell said energy prices are likely to push inflation higher in the near term, but emphasized that the overall impact remains uncertain and will depend on how long the crisis lasts.
The Bank of Japan also warned of inflationary pressure linked to rising oil prices, while the Reserve Bank of Australia has already raised interest rates citing sharply higher fuel costs. Investors are now closely watching upcoming policy decisions from the European Central Bank and the Bank of England as global economic uncertainty deepens.
