Oil Surges Above $108 as Iranian Energy Facilities Targeted

Market Update:

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• Brent crude futures jump over 4% on news of attacks
• Iran's Revolutionary Guards issue evacuation warnings for Gulf oil facilities
• Damage extent to South Pars petrochemical facilities remains unclear
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DUBAI, March 18 (Reuters) - Some facilities belonging to Iran's oil industry in South Pars and Asaluyeh were attacked on Wednesday, semi-official Tasnim news agency reported, while Iran's Revolutionary Guards issued evacuation warnings for several oil facilities across Saudi Arabia, UAE, and Qatar.

Oil prices jumped on the news, with Brent crude futures LCOc1 gaining over 4% to a session high above $108 per barrel. Analysts have warned that any attack in South Pars would raise the possibility of retaliatory attacks by Iran on Gulf energy facilities including those belonging to oil majors in Qatar.

Qatar has fully shut its liquefied natural gas production because of the war, cutting 20% of the world’s LNG supplies, and any damage to facilities could extend the outage beyond May.

Tasnim said the attacks targeted petrochemical facilities in South Pars and added the extent of the damage was not yet clear.

Iran produces natural gas from the offshore South Pars gas field, which makes up around a third of the world's largest reservoir of natural gas. Iran shares the reservoir with major exporter Qatar.

Sanctions and technical constraints have meant most gas Tehran produces from South Pars is for domestic use. Iran's gas production totalled 276 billion cubic meters in 2024, with 94% consumed in Iran, according to data by the Gas Exporting Countries Forum.

The U.S.-Israeli war on Iran and Tehran's attacks on Gulf neighbours have disrupted oil and natural gas exports from the Middle East and forced production stoppages.

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