Along with US-Israel war against Iran entering its third week, the world faces the risk of an even bigger oil shock as military attacks escalate to major energy infrastructure, raising fears of a protracted conflict.
In this commentary, the South China Morning Post examines the latest developments and factors causing oil price volatility and assesses the potential impact on the global economy.
Energy infrastructure: what’s the latest?
Israeli air strike hitting energy centers on Wednesday at the Pars natural gas field in Southern Iran, the world’s largest, which it shares with Qatar.
In retaliation, Tehran attacked the world’s largest liquefied natural gas facility in Qatar with a ballistic missile and threatened critical energy infrastructure in Saudi Arabia and the United Arab Emirates.
Global oil prices rose on the news, with benchmark Brent trading between US$113 and US$115 by press time on Thursday after earlier closing at US$107.38.
Meanwhile, the Iranian-controlled Strait of Hormuz – a vital waterway for energy flows – effectively closed.
US Vice President JD Vance warned on Wednesday that consumers face a “bad road ahead” as global oil prices rise.
