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Calgary Herald
5 hours ago
- Business
- Calgary Herald
With Iran and Israel in conflict, oil traders brace for supply turmoil
Article content Oil-watchers are bracing for a further price rally after Israeli strikes on Iranian energy assets heightened the risk to Middle East supplies. Article content Israel temporarily knocked out a natural gas processing facility linked to the giant South Pars field, Iran's biggest, in an attack on Saturday, and targeted fuel storage tanks during strikes as part of its campaign against Tehran's nuclear program. Article content Article content While the attack was concentrated on the Islamic Republic's domestic energy system rather than exports to international markets, oil traders and analysts are preparing for more turmoil after prices surged the most in three years on Friday. Article content Article content Despite U.S. sanctions, Iran remains the third-biggest producer in the Organization of the Petroleum Exporting Countries. Its allies in Yemen, the Houthi militants, have harassed ships in the region and Tehran has in the past threatened to halt the Strait of Hormuz, a critical transit point in the Persian Gulf. It has, however, never blockaded the key maritime chokepoint. Article content 'The escalating, likely prolonged, conflict and its expansion to economic targets with civilian casualties should build some more risk premium into crude early this week,' said Bob McNally, president and founder of Rapidan Energy Advisers LLC and a former White House energy official. Article content Article content West Texas Intermediate futures, the U.S. benchmark, rallied as much as 14 per cent on Friday before settling near US$73 a barrel. A closure of Hormuz could propel international prices to as high as US$130, JPMorgan Chase & Co. has predicted. A jump in oil would add to inflation pressures around the world. Article content Israel's strike on Saturday triggered a powerful explosion and fire at the onshore Phase 14 gas processing plant and forced the shutdown of a production platform at the South Pars field, according to a report from the semi-official Tasnim news agency. Article content 'Now that threshold has been crossed, there will be questions about whether Israel is going to target more Iranian energy infrastructure,' said Richard Bronze, head of geopolitics at consultant Energy Aspects Ltd. 'We appear to be in an escalatory cycle.' Article content
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First Post
14 hours ago
- Business
- First Post
Israel attacks world's largest gas field in Iran: What will be the impact?
Iran has been forced to partially shut operations at the South Pars gas field after a fire caused by an Israeli air strike. The South Pars gas field is the biggest in the world. But what do we know about it? What happened? What will be the impact? read more This frame grab taken from Islamic Republic of Iran Broadcasting (IRIB) shows a refinery in Iran's South Pars gas field after it was struck by an Israeli drone in Kangan. AP Israel has hit the largest gas field in the world. Iran has been forced to partially shut operations at the South Pars gas field after a fire caused by an Israeli air strike. The South Pars gas field is the biggest in the world. But what do we know about the field? What happened? What will be the impact? Let's take a closer look What happened? First, let's take a brief look at the South Pars gas field. The South Pars gas field is in Iran's southern province of Bushehr. STORY CONTINUES BELOW THIS AD Located in the middle of the Gulf, it is jointly owned by Iran and Qatar (which calls it the North Dome). It spans 9700 square kilometres of which 3,700 square kilometers belongs to Iran. It comprises an oil field and a processing plant. It is thought to hold over 51 trillion cubic meters of natural gas. It holds around 48 per cent of Iran's natural gas reserves. It is responsible for most of Iran's natural gas production – which stands behind only the United States and Russia. A fire resulted as a result of the strike, according to Iranian authorities. People look at fire burning at South Pars gas field, in Tonbak, Bushehr Province, Iran, in this screen grab from a handout video released on June 14, 2025. Reuters The blaze, which occurred in one of the four units of Phase 14 of South Pars, has now been tamped down. It stopped production of 12 million cubic metres of gas. However, the National Iranian Oil Refining and Distribution Company said oil refining and storage facilities had not been damaged and continued to operate. Iran produces around 275 billion cubic meters (bcm) of gas per year – around 6.5 per cent of global gas output – all of which is consumed domestically due to export restrictions. STORY CONTINUES BELOW THIS AD What will be the impact? This was Israel's first direct attack on Iran's oil and gas infrastructure. It marks a significant escalation in the conflict between the two nations. Analysts are worried about the possible fallout. 'This is probably the most important attack on oil and gas infrastructure since Abqaiq,' Jorge Leon, an analyst at Rystad Energy, talking about the 2019 attack on Saudi Arabian oil fields, told Bloomberg. 'This is a warning shot that Israel is willing to hit Iranian energy infrastructure if Israeli civilians are targeted, ' Richard Bronze, head of geopolitics at Energy Aspects, told The New York Times. Oil prices had already surged 14 per cent on Friday after Israel attacked Iran. The price of oil eventually settled seven per cent higher – at $73 (Rs 6,200 per barrel). This fresh attack could push oil prices even higher from tomorrow (June 16). Experts also fear the conflict in West Asia could disrupt the flow of oil to the rest of the world. Iran, which is part of Organisation of the Petroleum Exporting Countries (OPEC), currently produces around 3.3 million barrels per day (bpd). STORY CONTINUES BELOW THIS AD It exports over 2 million bpd of oil and fuel. 'Israeli action has so far avoided Iranian energy infrastructure, including Kharg Island, the terminal responsible for an estimated 90 per cent of Iran's crude oil exports,' said Ben Hoff, head of commodity research at Societe Generale. 'This raises the possibility that any further escalation could follow an 'energy-for-energy' logic where an attack on one side's oil infrastructure might invite a retaliatory strike on the other's,' Hoff said. With inputs from agencies
Hindustan Times
16 hours ago
- Business
- Hindustan Times
Israel strikes Iran's gas fields: Why is South Pars indispensable for Tehran?
Tel Aviv and Tehran's military conflict escalated on Saturday as the Israeli army struck the world's biggest gas field in Iran, threatening the latter's energy security, which is highly dependent on the domestic oil and gas production sector. Iran's South Pars gas field, which it shares with Qatar, was on fire after Israel's precision strikes. The fire was extinguished. However, the attack shows that Israel will go for Iran's economic backbone if the conflict escalates further. The South Pars field is located offshore in Iran's southern Bushehr province. Iran is the world's third-largest gas producer after the US and Russia. It produces around 275 billion cubic meters (bcm) of gas per year, or some 6.5% of global gas output. However, because of the US sanctions on exports, it is forced to consume the fuel domestically. It shares the field with Qatar, which produces 77 million tonnes of liquefied gas; it supplies the gas to several nations in Europe and Asia. The attack can potentially disturb the global oil pricing. The attack heightens the risk to oil infrastructure in Iran, OPEC's third-biggest producer, and to shipments from elsewhere in the region. South Pars provides roughly two-thirds of the country's supplies. 'It's going to be pretty significant,' Richard Bronze, head of geopolitics at consultant Energy Aspects Ltd., said of Saturday's attacks. 'We appear to be in an escalatory cycle,' and there will be 'questions about whether Israel is going to target more Iranian energy infrastructure,' he added. Iran has been facing an energy crisis for a long time, with some areas facing the worst power outages in decades. The Iran Chamber of Commerce, Industries, Mines and Agriculture estimated that these blackouts cost the cippled economy about $250 million a day. 'This is a significant escalation,' said Jorge Leon, an analyst at Rystad Energy A/S who previously worked at the OPEC secretariat, said of the onslaught on Saturday.'This is probably the most important attack on oil and gas infrastructure since Abqaiq,' Leon said, referring to the 2019 strike that briefly crippled one of Saudi Arabia's key oil-processing plants. Also read: Iran Israel war news live updates: 'We can easily get a deal done, end this bloody conflict' says Trump amid strikes In the 1970s, Iran's oil production was at its peak, with the nation accounting for 10 per cent of the world's output at the time. However, after the 1979 revolution, the US crippled the Iranian economy by announcing sweeping sanctions on Tehran. The United States tightened sanctions in 2018 after Trump exited a nuclear accord during his first presidential term. Iran's oil exports fell to nearly zero for some months. China is the biggest importer of Iranian oil. It says it does not recognise sanctions against its trade partners. The main buyers of Iranian oil are Chinese private refiners, some of whom have recently been placed in the US Treasury sanctions list. If Israel attacks Iran's oil and gas production, it may also impact China, the United States' biggest strategic and economic rival. Analysts, however, say Saudi Arabia and other OPEC members could compensate for the drop of Iranian supply by using their spare capacity to pump more. With inputs from Bloomberg, Reuters
NDTV
17 hours ago
- Business
- NDTV
Israel Bombed World's Largest Gas Field In Iran. Why It Is A Big Deal
New Delhi: Iran was forced to partially halt gas production at the world's largest gas field, South Pars, after an Israeli airstrike caused a fire at one of its key processing units on Saturday. The attack, which hit Phase 14 of the offshore site, led to the suspension of 12 million cubic metres of gas output per day. This was Israel's first direct strike on Iran 's oil and gas infrastructure. FOLLOW LIVE UPDATES About The South Pars Gas Field The South Pars gas field, located offshore in Iran's Bushehr Province and shared with Qatar (which calls its portion the North Field), is the world's largest natural gas reserve. It provides nearly two-thirds (around 66 per cent) of Iran's domestic gas, which is essential for electricity, heating, and petrochemical production. Iran is the world's third-largest gas producer after the United States and Russia, generating around 275 billion cubic metres (bcm) annually, about 6.5 per cent of global output. Due to international sanctions, most of this gas is consumed domestically, though some is exported to countries like Iraq. Qatar, with help from global energy firms like Shell and ExxonMobil, exports 77 million tonnes of liquefied natural gas (LNG) every year from the same field to Europe and Asia. Why This Strike Is A Big Deal New Front In A Dangerous Conflict Until now, Israeli strikes focused on Iran's military and nuclear assets. But targeting energy infrastructure like South Pars crosses a red line, signalling that economic warfare is now in play. "This is probably the most important attack on oil and gas infrastructure since Abqaiq," said Jorge Leon, an analyst at Rystad Energy, referencing the 2019 attack on Saudi oil facilities that shook global markets, as per Bloomberg. Threat to Global Energy Supplies South Pars is a shared field with Qatar, which is a major global LNG supplier. Escalation in this region raises fears of attacks on other critical chokepoints like Kharg Island (Iran's main oil export terminal) and the Strait of Hormuz, through which 21 per cent of the world's LNG and 14 million barrels of crude oil daily pass. "This is 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, as per The NYT. Analysts warn that if the conflict continues to escalate, Qatar's energy operations and Israel's own infrastructure could also become targets. Both countries play critical roles in energy exports, and any attack could create ripple effects across Asia, Europe, and global supply chains. Market Reactions Oil prices surged as much as 14 per cent on Friday following the initial Israeli strikes, settling around $73 (Rs 7000) per barrel. Even though South Pars mostly serves domestic needs, its significance lies in the message: energy is now fair game. With OPEC's third-largest producer (Iran) under attack, any future assault on Kharg Island or disruption in the Strait of Hormuz could send oil and gas prices skyrocketing. The fighting will go on despite international calls for de-escalation, Iranian media reported. Iran's President, Masoud Pezeshkian, has vowed a fiercer retaliation, The NYT reports. Iran's Fragile Energy Sector The strike comes as Iran faces one of its worst energy crises in decades. Gas shortages have caused frequent blackouts, costing the economy around $250 million a day, according to the Iran Chamber of Commerce. The government has been forced to cut power to homes and factories, even before the Israeli strikes. Sanctions and outdated infrastructure have left Iran struggling to meet demand. "Attacking Iran's energy infrastructure will be a disaster because repairing them will be costly and take time," said Abdollah Babakhani, an Iran energy expert based in Germany. Global Impact Though South Pars fuels Iran domestically, its location in the Persian Gulf, a key global energy route, makes it critical. The Israeli strike shows energy assets are now on the battlefield, raising risks for oil markets. Any escalation could spike fuel prices and trigger inflation, especially in energy-dependent regions like Europe and Asia.
The Age
18 hours ago
- Business
- The Age
Israeli strikes on Iran's oil stoke fears of higher petrol prices
Israeli strikes on Iranian energy infrastructure have heightened fears the conflict will severely disrupt Iran's oil production, driving up petrol prices in Australia and threatening a spike in inflation. Iranian state media reported on Sunday that Israel targeted one of the country's largest oil refineries, Shahr Rey, and also the separate Shahran fuel depot in the capital Tehran. In a separate attack, an Israeli strike over the weekend triggered a powerful explosion and fire at a natural gas processing facility linked to Iran's immense South Pars field. The attacks heighten the risk to oil infrastructure in Iran, a leading global producer and OPEC's third-largest member. US crude prices surged as much as 14 per cent on Friday, before settling near $73 a barrel when markets closed. If sustained, the rise in oil prices so far this month threatens to drive up Australian fuel prices at the pump by 12¢ a litre, according to economists at AMP. The targeting of energy assets is a new front in the conflict, which escalated on Friday when Israel launched a wave of airstrikes against Iran's nuclear program. Richard Bronze, head of geopolitics at consultant Energy Aspects Ltd said Saturday's attack raised 'questions about whether Israel is going to target more Iranian energy infrastructure'. Saul Kavonic, energy analyst at MST Marquee, said the strikes had 'only impacted domestic oil infrastructure in Iran so far, so are unlikely to impact global supply'.
