Global energy prices soar as oil, gas production, shipping hit

LONDON, Mar 3 (Reuters): Global oil and gas prices jumped on Tuesday as the US-Israeli war on Iran halted energy exports from the Middle East, with Tehran attacking ships and energy facilities, closing navigation in the Gulf and forcing production stoppages from Qatar to Iraq.

The benchmark Brent crude oil contract gained nearly 8% on Tuesday to above $83 per barrel, the highest since July 2024, taking gains since Friday to more than 15%. European gas prices soared as much as 40% before paring gains, adding to a 40% surge on Monday. Sugar, fertiliser and soy prices have all risen too.

The conflict risks triggering a renewed spike in inflation that could choke off economic recovery in Europe and Asia if the war is prolonged in a region that accounts for just under a third of global oil production and almost a fifth of natural gas.

Iraq, OPEC's second-largest producer, on Tuesday said it may be forced to cut production by more than three million barrels per day in a few days if oil tankers cannot move freely to loading points, according to two Iraqi oil officials. As of Tuesday, Iraq has decreased production ?from the Rumaila oil field by 700,000 bpd and cut 460,000 bpd from the West Qurna 2 field, the officials said.

Shipping at a standstill

Traffic through the Strait of Hormuz was closed for a fourth day after Iran attacked five ships, choking off a key artery accounting for about 20% of global oil and LNG supply.