Iran Undecided Whether It Will Attend Next Round of Nuclear Talks With U.S.
Tehran is undecided on whether it will attend the next round of negotiations with the U.S., an Iranian Foreign Ministry spokesman said in state media. U.S. and Iranian officials were expected to meet for a sixth round of talks in Oman Sunday.
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New York Times
an hour ago
- New York Times
Live Updates: Israel Bombards Tehran, Setting Oil Facilities Ablaze
Nearly all of Iran's oil exports come from the Port of Kharg Island Oil Terminal on a small coral land mass in the northern part of the Persian Gulf off the Iranian coast. The conflict between Israel and Iran appeared to be spreading on Saturday to Iran's energy infrastructure, raising fears about energy supplies from the Middle East. Iran's oil ministry blamed Israeli drones for attacking part of the South Pars natural gas field, one of the world's largest, and a refinery, causing fires at both. It is not clear how far Israel intends to go in attacking Iran's energy facilities, a crucial source of export cash for the country as well as domestic energy that looks particularly vulnerable. 'This is a first salvo into energy and a warning shot that Israel is willing to hit Iranian energy infrastructure if Israeli civilians are targeted,' said Richard Bronze, head of geopolitics at Energy Aspects, a research firm. Other Iranian installations are at risk, analysts say. 'There is one clear target that would make it very easy if Israel or the United States wanted to impact Iran's oil exports,' Homayoun Falakshahi, senior analyst for crude oil at Kpler, a research firm, said during a webinar on Friday. 'And this is Kharg Island.' Nearly all of Iran's oil exports leave from tankers at berths around Kharg Island, a small coral land mass in the northern part of the Persian Gulf off the Iranian coast, potentially making it a target in a protracted war, analysts say. Iran has been developing another terminal in Jask, a coastal city just outside the Strait of Hormuz on the Gulf of Oman, but its capacity appears to be limited, Mr. Falakshahi said. Israel's energy system also looks exposed, analysts say, which could potentially restrain its attacks. Were the fighting to escalate to major energy installations across the region, the consequences could be serious not only for Iran and its neighbors but for their customers, especially in Asia, and world markets. Oil prices have already jumped since the Israeli attack early Friday. Any escalation that might appear to threaten international supplies could send prices soaring. Iran's coastline stretches along the northern shore of the Strait of Hormuz, a narrow passageway through which tankers and other ships must pass on their way from the Persian Gulf to the Arabian Sea and the Indian Ocean. Iran has a history of interfering with shipping in the area. Kpler has estimated that 21 percent of the world's liquefied natural gas, most of it from Qatar, flowed through this gauntlet in 2024. A hefty 14 million barrels of crude oil a day also moves through the strait, according to Kpler's estimates. The conflict with Israel comes at a delicate point for Iran's petroleum industry, which is a crucial pillar for its economy and its ability to fund its nuclear program. Strikes on the Iranian facilities could potentially negate years of effort to rebuild production from the low levels at the beginning of this decade when President Trump pulled out of a deal reached by President Barack Obama under which Iran agreed to curbs on its nuclear program in return for an easing of sanctions, including on its oil sales. Oil production in Iran has increased around 75 percent to about 3.4 million barrels a day from depressed 2020 levels, while exports have roughly tripled, according to estimates from the International Energy Agency and Kpler. FGE, an energy consulting firm, estimates that Iranian energy export revenues, including oil products and electricity, have almost quadrupled since 2020 to $78 billion in 2024. Even before the Israeli strikes, Iran faced major handicaps. Although it has some of the world's richest troves of oil and natural gas, it has strained to exploit them largely because of protracted political tensions with the West dating to the establishment of the Islamic Republic in 1979. These frictions have kept Western firms from working in Iran for years. Lack of capital and expertise has limited development of oil and natural gas fields and access to major investment projects like liquefied natural gas facilities that might have benefited the Iranian industry. Qatar, whose huge gas fields in the Persian Gulf border Iran's, has become rich through L.N.G. development with western partners like Shell and Exxon Mobil, which allow the natural gas to be exported to Europe and Asia. Despite having large natural gas resources, Iran has recently struggled to produce enough fuel to prevent power cuts. Much of Iran's petroleum infrastructure, including the refineries that supply products like gasoline to local markets, are old. If these facilities suffered significant damage, Iran 'might struggle more than maybe other countries' to find the spare parts and international support to repair them, Mr. Bronze said. Sanctions also mean that few customers are willing to buy Iranian oil. Nearly all of Iran's crude exports go to China. The main buyers are small refiners there, known as 'teapots' Mr. Falakshahi said, that are able to extract a substantial discount of up to $7 a barrel from the Iranians. If those refiners were unable to buy Iranian crude, they would need to look elsewhere, potentially tightening global markets. Even before the current conflict, signs were emerging of pressure on Iranian oil exports. The Trump administration has been tightening sanctions that saw a de facto easing in the Biden administration. Chinese imports dropped substantially in May, according to Kpler's estimates. Analysts say Israel's energy infrastructure could also prove vulnerable. Already, the Israeli government has as a precaution ordered a production halt at two of the country's three offshore natural gas platforms, including Leviathan, which is operated by Chevron. Gas fuels most of Israel's electric power generation. If this stoppage continued, it could also reduce or halt gas exports to Egypt, hurting customers there. Israel is also heavily dependent on imported oil brought through the port of Ashkelon in the south of the country. 'They are also very fragile,' Mr. Falakshahi said of Israel. The Saudis and the United Arab Emirates have worked in recent years to ease tensions with Iran and head off future incidents like the attack on a Saudi Aramco facility called Abqaiq in 2018 that temporarily knocked out about half of the kingdom's export capacity. Those attacks were claimed by the Houthi militant group in Yemen, but the United States at the time blamed Iran for them. Analysts have said it is conceivable that if Iran feels sufficiently threatened, it could target petroleum installations in those countries again. 'The question is,' Mr. Bronze said, how would Iran respond 'if it feels like its core economic interests, its energy system, have been attacked.' Farnaz Fassihi contributed reporting.
Forbes
an hour ago
- Forbes
Israel-Iran Strikes: What Are The Worst Case Scenarios For Oil Markets
An oil tanker negotiating shallow waters of northern Persian Gulf. (Photo: by Barry Iverson) Israel-Iran strikes have taken a dangerous turn in recent days. They follow an attack by Israel on the Iran's military and nuclear sites. Ever since tensions escalated on Friday, there have been calls for restraint from the United Nations, U.S., U.K., and European Union but to no avail. Fighting has so far been restricted to the two warring countries. However, the level of the ferocity of the strikes has raised the alarming prospect of a wider conflict in a region that is a key exporter of crude oil. On Friday, Israel's Prime Minister Benjamin Netanyahu said his country's forces had struck nuclear and military targets deep inside Iran and that action will continue until his country has met all its targets. Israeli strikes targeted sites in Arak and Isfahan, as well as Iran's main uranium enrichment site Natanz and its capital Tehran. In retaliation, Iran has launched over a 200 ballistic missile attacks against Israel so far, and counting. It has also called off the ongoing U.S.-Iran nuclear talks and threatened to attack U.S., U.K. and French military bases and ships in the region if they help with stopping its military strikes on Israel. Critically, Iran's oil and gas infrastructure has been left somewhat untouched by Israel. But given the unpredictability of the situation, this can no longer be ruled out. Late on Saturday, the Shahran oil depot in Tehran was hit by Israel, following on from earlier attacks on Iranian natural gas fields. Should Iran's energy infrastructure be hit more widely and the Islamic Republic retaliates to disrupt regional energy supplies or to draw the U.S. into the conflict, there could be consequences of varying degrees of severity for the oil market. Here are a five worst case scenarios, split between what Israel and Iran may do next in an unpredictable and rapidly escalating conflict. Israel may launch an attack on Kharg Oil Terminal, situated on Kharg Island, 15 miles off Iran's northwestern coast. The terminal handles over 90% of the country's global crude oil exports. If such an attack cripples the facility, the domino effect could be instant. It carries the potential for huge disruption, primarily to Iran's exports to China — the world's largest importer of oil. Not only would it contribute to a further short-term spike in prices, but forward oil futures contracts four to six months out may also see upswings. That's because bringing it back onstream would neither be easy nor quick. Instead of a high profile oil export target like the Kharg Terminal, Israel could hammer Iran's domestic energy chain. The Shahran oil depot in Tehran on Saturday by Israel lends weight to this theory. Upscaling the tactic may involve targeting a bigger cluster of oil terminals and hubs in the Southern province of Hormozgan. The region is also home to two free trade zones on Kish and Qeshm Islands. Kish also hosts the Iranian oil bourse — the only exchange of its kind that does not trade oil and derivatives in U.S. dollars. The domestically focused Abadan Refinery - located across Shatt Al-Arab River on the border between Iraq and Iran - could also be an Israeli target. Reliable up-to-date data on the refinery's production capacity is hard to find. But estimates and regional media sources (e.g. Financial Tribune) suggest it could be producing around 400,000 barrels per day. Abadan has symbolic status too as Iran's oldest oil processing facility. Originally built in 1909 by Anglo-Persian oil (which later became BP), it services around 25% of Iran's domestic fuel demand. Any outages there could be crippling for both Iranian consumers as well as the country's military. Mahshahr Oil Terminal, an oil port located on the Khor Musa Channel, is a related target. It stores and shifts products from the Abadan Refinery, and serves as an engineering and jetty construction hub for Iran. If any of these are hit, Iran's domestic supply chain will likely be severely crippled and may require Tehran to redirect resources. Instead of targeting oil production and export facilities, Israel may execute a plan to cripple Iran's natural gas industry. Iran produces just over 270 billion cubic meters of natural gas per year, almost entirely for domestic use. Israel has already attacked two of Israel's gas fields, including Phase 14 of South Pars so far. The attacks could be a harbinger of what may follow. Such targets would have little ramifications for the global natural gas industry, although Iran does share the natural gas basin with Qatar. However, Iran's natural gas production volume equates to around 6% of the world's output. Domestic outages may see Tehran turning to international liquefied natural gas supplies to meet its needs. For its retaliatory measures, many ponder if Iran could shut down the Strait of Hormuz, a key maritime artery for oil and liquefied natural gas shipments from the Persian Gulf out to the Gulf of Oman and beyond (see map below). Cargo volumes lend relevance to such discussions. Iran's own shipments, plus that of Saudi Arabia, Kuwait, Iraq, and to an extent United Arab Emirates' crude - roughly equating to 30% of the world's traded oil - as well as Qatar's LNG cargoes pass through the Strait daily. Strait of Hormuz, a waterway between Persian Gulf and Gulf of Oman, a strategically extremely ... More important choke point, with Iran to the north and UAE and Oman's exclave Musandam to the south. While Iranians could certainly can attempt to close the Strait, they most probably won't, despite junior Iranian political voices currently calling for it. For starters, it would disrupt Iran's own oil shipments. Furthermore, a U.S.-led global retaliation may likely follow that would leave Iran's own coastline and all its ports vulnerable to a vastly superior American air and naval strike arsenal. Nearby Bahrain is home to the U.S. Navy's Fifth Fleet. Any disruption would also irk Iran's number crude oil customer - China. Iran exported on average 1.65 million bpd of oil to China last year. Furthermore, nearly half of crude oil passing through the Strait - whether Iranian or not - in the region of 20.5 million bpd also heads to China. A potential blockade would be very difficult to maintain under pressure from Beijing, the world's main taker of Middle Eastern oil. In an attempt to drag the U.S. into the conflict, Iran may either directly or via its regional proxies in Iraq, Yemen, Lebanon, West Bank and Gaza, attack the energy infrastructure of neighboring Gulf states. This has alleged precedent, for in the past Iran has been accused of targeting Saudi Arabia's oil fields (2019) and an attack in the UAE (2022). While the route of direct attacks remains open to Iran, its regional proxies Hamas and Hezbollah are severely diminished at the moment courtesy of Israel's sustained campaign against them. However, the Houthi Rebels in Yemen - the last standing Iranian proxy ally - remain in a position to ramp up their attacks on commercial shipping, and oil and gas cargoes in the Red Sea - a campaign that began in 2023. Sidestepping energy infrastructure, on Saturday, Iranian officials also warned that the country would attack the military bases of the U.S., U.K. and France in the region, if they are seen to be coming to Israel's defense. All three nations have also have special forces camps and large diplomatic missions in the Gulf. Such a scenario is being widely contemplated in intelligence circles, with U.S. regional forces closely monitoring the situation and the U.K. opting to send more military aircraft to its bases 'for contingency support across the region.' Any such escalation will likely trigger a wider regional war, and prolonged disruption to oil cargoes will likely draw China into a diplomatic row too. As things stand, should one or more of the above scenarios, especially an attack on Iran's Kharg Terminal, materialize during the Israel-Iran strikes, there could be serious near-term ramifications for the global oil and gas markets.
Wall Street Journal
an hour ago
- Wall Street Journal
Israeli Defense Minister Says: 'Tehran Is Burning'
In a post on X, Israeli Defense Minister Israel Katz says: 'Tehran is burning.' It comes as Iran's oil ministry said that Israel struck the Shahran oil depot in western Tehran—one of the capital's key fuel sites. A second depot in southern Tehran was also hit, it said. Earlier in the day, Katz in a statement said that 'Tehran will burn' if Iran continues to fire missiles at the Israeli home front.
