Iran warns of retaliation against US energy assets

• Brent rises to $97 a barrel
• Oil and gas companies ‘exposed’
• Aramco’s Jazan facility reportedly hit

Oil prices extended their rally in early trading on Tuesday after Iran threatened to strike back at US energy facilities in the Middle East, stoking fears of supply disruption.

Brent crude futures rose 0.35 percent to $97.34 a barrel by 00:00 GMT. US West Texas Intermediate crude jumped 1.26 percent to $92.63.

The added risk premium pushed Brent to its highest level since July 24. AGBI reported last week that war risk cover was adding up to $8 to the cost of a barrel of oil.

Iran’s parliament speaker Mohammad Bagher Ghalibaf warned in a social media post that Tehran would retaliate against US energy facilities in the region if Washington attacked its oil and gas assets.

“It’s simple: the oil and gas production chain here is sprawling, accessible, and exposed. American oil and gas companies across these waters and facilities share that exposure. Strike our assets and you get struck,” he said.

US forces struck three Iranian oil tankers on Saturday after the Islamic Revolutionary Guard Corps Navy targeted tankers in the Strait of Hormuz.

Saudi Aramco’s oil facilities in Jazan, the closest industrial city to the Yemeni border, have been hit, the Financial Times reported, citing two unidentified sources.

Saudi Arabia has not released a statement so far on the Jazan attack.

Iraq is seeking to reach its pre-war oil export capacity of 3.4 million barrels, Iraqi prime minister’s adviser Mazhar Muhammad Salih told the state-owned Iraq News Agency.

The Opec member plans to use neighbouring regions to meet its export target, he said.

Almost 80 to 85 percent of Iraq’s oil exports passed through Hormuz before the war started on February 28.

Further reading:

• UAE and Bahrain could be next to embrace fracking
• UAE events organisers squeezed by ‘ridiculous’ insurance costs
• How the Iran conflict has reshaped the Gulf economy

US investment company Goldman Sachs raised its Brent and WTI price forecasts by $5 to $80 and $75 per barrel, respectively, for 2027 in the base-case scenario, expecting Middle East shipping disruptions to continue into the next year, Reuters reported.

In the scenario of a persistent 4 million bpd shortfall, the investment bank forecast oil prices could rise above $120.

The number of vessels transiting through the Strait of Hormuz reached seven on Monday, down from eight the previous day, Reuters said, citing Kpler data.

Gulf stock exchanges ended mixed on Monday.

Saudi Arabia’s benchmark index closed 0.4 percent lower.

Dubai’s main index climbed 0.8 percent, while Abu Dhabi’s benchmark ended flat.