- Oil futures rallied June 15 as Iran, Israel continued to trade attacks.
- NYMEX crude opens 5% higher; Iran threatens to attack ships in Persian Gulf.
- Israel launched airstrikes targeting multiple key Iranian oil and gas facilities.
Escalating hostilities between Israel and Iran have begun to significantly impact oil and gas infrastructure in Iran, raising alarms over potential disruptions to global energy markets, reports Platts.
Iran-Israel Conflict Disrupts Oil, Threatens Key Routes
On June 13–14, Israeli strikes targeted multiple facilities—including nuclear sites, gas plants, oil depots, and storage terminals—triggering a series of fires and temporary shutdowns. Among key sites affected were the South Pars gas field, Fajr Jam gas facility, and Shahran oil depot near Tehran. Although no refineries were directly hit, gas production at several plants was suspended amid hazardous smoke conditions, prompting advisories to steer clear of certain areas in the capital.
Oil benchmarks reacted sharply. Brent crude surged nearly 9% in a single day following the strikes on June 13, marking the most dramatic one-day price jump in years. While some of the early volatility subsided, markets remained cautious, with Brent hovering around the mid‑$70s per barrel. Concerns centered on whether Iran’s export capacity might be compromised—and whether increased military action or a blockade of the Strait of Hormuz could significantly tighten supplies.
Iran has responded by threatening to close the Strait of Hormuz—a critical maritime chokepoint responsible for the transit of nearly one-fifth of global oil output—further unnerving traders and analysts. A disruption here could push crude prices beyond $100–$150 per barrel, posing serious inflationary risks worldwide. Onshore and offshore fallout—including from fires at storage depots and gas assets—has raised the likelihood of further escalation and operational interruptions.
Asian markets have already felt the strain. Chinese refiners are growing wary, reassessing their reliance on Iranian crude amid worries of new U.S. sanctions targeting independent purchasers. Domestic benchmark crude futures in Singapore have ticked higher, translating to steeper domestic fuel prices in China, even as demand for gasoil trends downward due to the agricultural harvest season and the rise of electric vehicles.
Meanwhile, Iran is experiencing severe domestic disruption. Panic-buying at Tehran’s petrol stations has resulted in long queues—the worst seen in years—as consumers fear fuel shortages. Although national refineries managed to stay operational, storage issues and interrupted logistics have fueled public anxiety.
Despite these pressures, geopolitical analysts point out that broader market dynamics—a weakening global economy, muted OPEC+ spare capacity, and U.S. strategic positioning—have tempered what might otherwise be a more aggressive price rally. Still, the fragility of the current situation has left markets on edge, with any dramatic escalation posing the potential for a sustained energy shock.
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Source: Platts
