Oman Crude Price Surge Amid Gulf Energy Attacks: What It Means for Investors and Businesses
The official price of Oman crude for May delivery soared by $13.84 on Thursday, reaching $166.96, following Wednesday’s settlement at $153.12. The monthly average price for Oman crude for March delivery currently stands at $62.17 per barrel, reflecting a modest increase of $0.08 from February.
Brent crude surpassed $115 per barrel amid escalating tensions, after Tehran threatened to target regional installations in retaliation for an Israeli strike on a site linked to the vast South Pars gas field, which Iran shares with Qatar. Iranian missile attacks hit Qatar’s Ras Laffan—the world’s largest liquefied natural gas (LNG) hub—causing extensive damage.
Simultaneously, drone strikes targeted a Saudi oil refinery on the Red Sea and caused fires at two refineries in Kuwait. These developments have driven a sharp rise in global oil prices and pushed European gas prices up by as much as 35%, intensifying concerns about the impact of the nearly three-week-old Middle East conflict on energy supplies.
The international benchmark Brent crude surged by six percent, after earlier climbing more than 10%, while the main US oil contract, West Texas Intermediate (WTI), edged up 0.3%.
“The prospect of a longer, more protracted conflict is in sharp focus, as both sides intensify attacks on energy infrastructure,” said Susannah Streeter, Chief Investment Strategist at Wealth Club. She added that “downbeat sentiment is spreading rapidly as investors assess the economic repercussions worldwide.”
Stock markets mirrored this caution: Frankfurt and London lost about two percent, Paris fell 1.7%, while Tokyo dropped more than three percent. Hong Kong and Shanghai also registered declines.
Since the conflict began, Tehran’s strikes across the Gulf have effectively closed the Strait of Hormuz, a critical passage for about one-fifth of global oil and gas shipments. The surge in energy costs has stoked fears of rising inflation and potential hikes in interest rates.
Central banks are currently in a “state of limbo,” awaiting clarity on whether the Middle East crisis will trigger a sustained inflationary shock, commented Dan Coatsworth, Head of Markets at AJ Bell.
The Bank of England and the European Central Bank are expected to hold interest rates steady on Thursday, following the US Federal Reserve’s recent decision to keep borrowing costs unchanged. Meanwhile, data released Wednesday showed US wholesale inflation rose more than anticipated in February, prior to the war and the spike in oil prices.
Federal Reserve Chair Jerome Powell noted that higher energy costs are likely to push inflation upward in the near term but emphasized the uncertainty ahead. “We’re right at the beginning of this… you just don’t know how big this will be and how long it lasts,” he stated.
The Bank of Japan also maintained its rates on Thursday, warning of inflationary pressures from the crude price surge. This follows the Reserve Bank of Australia’s decision to raise its key rate on Tuesday, citing “sharply higher fuel prices.”
— وكالة فرانس برس
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The sharp surge in Oman crude prices amid escalating Middle East tensions creates significant inflationary pressures and supply risks for businesses in Oman, demanding strategic cost management and supply chain resilience. Smart investors and entrepreneurs should consider opportunities in energy sector diversification and inflation-hedged assets, while closely monitoring geopolitical developments that could further disrupt markets and elevate operating costs.
