Global Energy Market Report

Oil Prices End Higher Amid Escalating Conflict in the Persian Gulf

The benchmark price of oil rose on Thursday, despite volatility in trading, as escalating attacks in the Persian Gulf caused long-term damage to major energy facilities. Brent crude oil prices rose as much as 11% to $119.13 a barrel, before easing back to settle up 1.2% at $108.65.

Natural Gas Prices Surge

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Natural gas prices jumped in response to the attacks, with European gas futures surging as much as 35% to more than double their pre-war level. Fuel prices also climbed, underscoring the wider inflationary risks from the conflict. QatarEnergy, the state-owned energy company of Qatar, reported that two facilities at its Ras Laffan complex, which produce 13 million tons of liquefied natural gas (LNG) per year, were damaged in the attack.

Global Impact of the Conflict

The attack on Qatar's energy infrastructure raises concerns about long-term inflationary pressure in energy prices. The damage to production facilities in the region will have a lasting impact on the global economy. Rebecca Babin, a senior energy trader at CIBC Private Wealth Group, noted that the conflict is causing extreme volatility in the market, with prices retracing on de-escalation messaging and strength during Asian hours.

Emergency Oil Commitments

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The International Energy Agency (IEA) released details on emergency crude oil commitments by member nations. Japan, Canada, and South Korea will be among the biggest contributors to the broad release of stockpiles.

Market Reaction

Shares of American producers of natural gas rose as much as 6.7% on Thursday, while Shell Plc's Pearl gas-to-liquids plant sustained damage in the attack. QatarEnergy CEO Saad al-Kaabi told Reuters that the attack will affect the global supply balance and keep prices elevated worldwide.

Government Response

US President Donald Trump and Treasury Secretary Scott Bessent weighed in on the conflict, with Trump saying he's not putting troops anywhere and Bessent saying it's likely Iran's regime will collapse within itself.