Global gas and oil prices have seen a renewed spike after Iranian forces targeted production facilities for the first time during the current conflict. The Shah natural gasfield in the UAE was the site of a drone attack that forced an immediate shutdown of operations. This event pushed wholesale gas prices to €52 per megawatt hour, up from €30 before the war began.
The shift in Iranian strategy to target production sites rather than just storage represents a major escalation in the war with the US and Israel. On Tuesday, Brent crude climbed to $103.20, continuing a steady rise that has seen prices jump 50% in less than a month. The targeting of Iraq’s Majnoon field suggests a coordinated effort to disrupt regional output.
The Port of Fujairah, which usually exports 1 million barrels of oil daily, has seen its operations paralyzed. A tanker was hit by a projectile in the Gulf of Oman, and subsequent fires at the port have made loading impossible. This leaves the UAE with very few options for getting its remaining crude to international buyers.
The global economy is starting to feel the pressure of the “stranglehold” on the Strait of Hormuz. Because this waterway handles 20% of global oil and gas, the disruption is causing blackouts and fuel rationing across Asia. Bangladesh and Thailand are among the nations implementing emergency energy conservation protocols to avoid a total systemic failure.
Looking ahead, analysts from MST Marquee suggest that the market is focusing on escalatory actions on the ground rather than political messaging. Despite the surge, prices remain below the wartime peak of $119.50, but the threat to diesel and jet fuel supplies remains acute. The situation is evolving rapidly as damage assessments at the Shah gasfield continue.