Oil climbs further as Iran targets energy facilities

• Hormuz halt deepens supply concern
• Brent up 1.4%, WTI gains 1.1%
• Conflict drives swings across asset classes

Crude oil prices climbed further in early Wednesday trade after Iran targeted more energy facilities in the Gulf and maintained its blockade on shipping through the Strait of Hormuz, deepening supply concerns.

Brent crude fetched $82.53 a barrel at 05:30GMT, up 1.4 percent, while West Texas Intermediate crude was up 1.1 percent at $75.37. 

With the conflict entering its fifth day, French energy major TotalEnergies “has decided to organise the return of employees’ families present in several countries in the region”, the company said in a statement shared with AGBI.  

Iran on Tuesday struck storage tanks in the UAE’s port of Fujairah and around 200 international tankers carrying crude and downstream products became stranded as passage through Hormuz remained suspended, according to Lloyd’s List, a shipping news and analysis platform. 

The blockage is putting pressure on Iraq’s storage capacity, forcing the country to slow production at its Rumaila field and the West Qurna-2 project, Bloomberg reported. 

No LNG-laden carrier has crossed the strait since February 28, according to energy markets tracker Vortexa, and only a few empty vessels are available to load supplies in Qatar and the UAE. 

On Monday state-owned QatarEnergy halted LNG production after a drone hit production facilities, while on Tuesday it also paused production of many downstream products including urea, polymers, methanol and aluminium.

Egypt’s petroleum minister Karim Badawi offered to help Saudi Arabia move oil from its East-West pipeline, which bypasses Hormuz, from the Red Sea port of Yanbu to the Mediterranean via the Sumed pipeline.

US President Donald Trump said in a social media post that the US Navy might start escorting tankers through the waterway to “ensure the free flow of energy to the world”.

“The energy market is the main transmission channel through which this conflict can affect the global economy,” advisory firm Oxford Economics wrote in a note on Tuesday. 

“Prices at around current levels are broadly manageable,” it said. “However, if oil moved into the $90-100 per barrel range on a sustained basis, this would intensify inflation pressures.”

The S&P, Nasdaq and Dow Jones equity indexes closed down around 1 percent on Tuesday, while the FTSE 100 lost another 2.75 percent. 

Even gold fell 3.5 percent to below $5,124 an ounce on Tuesday as the conflict drove wild swings across markets and asset classes, including perceived safe havens. 

The precious metal rebounded early on Wednesday, with spot gold up 1.6 percent at $5,168.69.

Other metals followed, with silver up 3.5 percent at $84.92 per ounce, platinum rising 2.7 percent to $2,139.56 per ounce and palladium gaining 1.6 percent to $1,673.87.

“We consider the gravity of the situation has moved from high to severe in our pre-defined scenarios and consequently, the potential for events to weaken credit quality across sectors has increased,” S&P Global wrote on Tuesday.

The equity benchmark in Qatar dropped 0.7 percent on Tuesday after QatarEnergy said it would halt production of LNG and some petroleum products following Iranian strikes on its facilities in Ras Laffan and Mesaieed Industrial City.

Saudi Arabia’s Tadawul rose 0.7 percent.

Stock exchanges in the UAE will reopen on Wednesday for the first time since the conflict began on Saturday.