Israel bombs Iranian oil depot, OPEC cuts production, oil prices hit two-year high

Due to the near-complete closure of the Strait of Hormuz, global oil supplies have been affected, prompting the UAE and Kuwait to start reducing oil production. Meanwhile, the Israeli military bombed several Iranian oil warehouses in Tehran on Saturday evening. U.S. crude oil futures prices briefly hit $90 per barrel, while Brent crude futures approached $95 per barrel, reaching a nearly two-year high and marking the largest weekly increase ever.

Hormuz Strait Blocked, Middle Eastern Countries Reduce Oil Production

The Middle East conflict has almost entirely blocked the narrow waterway of the Strait of Hormuz connecting the Persian Gulf to open sea, with Iran threatening maritime safety, leading to a paralysis of maritime traffic. This has hindered oil exports from the world’s largest oil-producing region in the Persian Gulf and pushed London crude oil prices to their highest close in over two years, nearing $93 per barrel. Consumers are seeking alternative energy sources, which could also drive up global inflation.

According to Bloomberg, Abu Dhabi National Oil Company is “managing offshore oil production to meet storage needs.” Kuwait Petroleum Corporation stated that after “Iran threatened to ensure the safe passage of ships through the Strait of Hormuz,” it is reducing its oil field and refinery output.

Following production cuts by two OPEC members, many other countries in the region have also taken measures to cut production. Earlier this week, Iraq began limiting oil output as storage tanks became saturated; Saudi Arabia shut down its largest refinery; Qatar closed the world’s largest liquefied natural gas export plant after a drone attack.

Israeli Airstrikes on Tehran Oil Warehouses, Largest Weekly Oil Price Increase

The Israeli military bombed several Iranian oil warehouses in Tehran on Saturday evening, claiming these fuel depots serve the Iranian military.

Disruptions caused by Iran’s war have disturbed key energy market flows, with U.S. crude oil futures briefly reaching $90 per barrel, and Brent crude futures approaching $95 per barrel, hitting a nearly two-year high and marking the largest weekly increase ever.

Goldman Sachs noted that if the conflict persists, oil prices could break through $100 per barrel.

This article, “Israel Bombs Iran Oil Warehouses, OPEC Cuts Production, Oil Prices Hit Two-Year High,” first appeared on Chain News ABMedia.