Oil Surges on Fears of Gulf Production Halt in Iran Conflict

Oil prices have surged sharply after Qatar's energy minister warned that all oil and gas exports from the Gulf region could cease within days due to the escalating conflict between the US, Israel, and Iran.

Brent crude increased by 4.4% to $89.17 a barrel on Friday, following Qatar's warning that the crisis could "bring down the economies of the world." If shipping through the Strait of Hormuz remains blocked, prices could escalate to $150 a barrel within weeks, according to the minister.

The Strait of Hormuz, a narrow waterway between Iran and Oman, typically handles about one-fifth of global oil supplies daily. However, traffic has almost come to a halt since the conflict began, with vessels in the area coming under attack.

QatarEnergy, one of the world's largest LNG producers, has ceased production following "military attacks" on its facilities and has declared force majeure. The energy minister indicated it would take "weeks to months" to resume normal output even if the war ends immediately, and predicted that all Gulf exporters would need to follow suit.

The disruption has already affected Asian importers. India's Petronet LNG, the country's leading gas importer, issued force majeure notices to QatarEnergy and local buyers after its vessels were unable to reach the Ras Laffan loading port. Sources suggest that lower gas supplies have marginally impacted production at some Indian fertiliser companies, including IFFCO and Kribhco.

Gas prices have also increased in European markets, while consumers in the UK face higher fuel prices. Although current rises remain below the peaks seen after Russia's invasion of Ukraine, concerns are growing about broader economic impacts, including factory shutdowns and supply chain disruptions if the conflict persists.

The crisis underscores the vulnerability of world energy markets to geopolitical tensions in the Gulf region, which plays a vital role in international oil and gas supplies.