War between US, Israel and Iran cripples oil and gas exports

The conflict has caused outages in oil and gas production in countries from Qatar to Iraq and has virtually halted shipping through the Strait of Hormuz, through which around one-fifth of the world’s oil and liquefied natural gas supplies pass.

Iraq has already reduced production by about 1.5 million barrels per day and warns that, without the reinstatement of exports, it may be forced to halt almost all production. Qatar has suspended operations at some of the world’s largest liquefied gas facilities, which account for around 20 per cent of global LNG supplies. Saudi Arabia is also reporting problems, having halted operations at the large Ras Tanura refinery.

The result is a sharp rise in energy prices. Brent crude has risen above $81 per barrel, while European gas prices have jumped by up to 40 per cent in the short term.

Washington is considering deploying the US Navy to escort tankers through the Strait of Hormuz to prevent further disruption to the global energy market.

(reuters, mja)