Middle East Conflict Escalates: Attacks on Iranian Energy Infrastructure Send Oil Prices Surging
Oil prices jumped on Wednesday, March 18, 2026, following reports of strikes targeting Iran’s South Pars gas field and associated oil facilities. Both the US and Israel are being attributed to the attacks, raising fears of further disruption to global energy supplies.
Attacks Target Key Iranian Infrastructure
Iranian state TV reported the airstrikes, which hit the South Pars gas field – one of the world’s largest – and nearby oil and petrochemical facilities in Asaluyeh. The extent of the damage remains unclear, but the attacks represent a significant escalation in the ongoing regional conflict.
Oil Prices React Sharply
The immediate impact was felt in global oil markets. Nordsjøoljen (North Sea oil) jumped from $103.7 per barrel to over $105 within minutes and continued to climb, exceeding $108 per barrel by mid-afternoon. This surge reflects growing concerns about potential supply disruptions.
Broader Regional Instability and Energy Markets
These attacks are the latest in a series of incidents targeting energy infrastructure in the Middle East. Recent events include reported strikes on havens, oil refineries, and tankers. The effective shuttering of the Strait of Hormuz during the 19-day war has also significantly reduced output from Gulf producers.
Potential for Prolonged Disruption
Analysts warn that attacks directly targeting energy infrastructure pose a greater risk than previous incidents. Damage to facilities like South Pars could take years to repair, creating a prolonged disruption to energy supplies. Qatar’s Ras Laffan LNG plant, impacted by a recent incident, is expected to take up to four weeks to restart, even after a ceasefire.
Gas Markets Also Affected
The impact isn’t limited to oil. European gas prices also saw a slight increase, reflecting the overall nervousness in energy markets. With limited buffer in global gas storage, any further disruption could lead to significant price volatility.
US Response and Shifting Responsibilities
US President Donald Trump has suggested that countries reliant on the Strait of Hormuz should take greater responsibility for securing the waterway, rather than relying on the US. He also alluded to a more forceful approach towards Iran, questioning the potential consequences of “finishing off” the “Iranian Terror State.”
Iran’s Retaliation and Further Escalation
Iran has vowed retaliation for the attacks, launching fresh waves of missiles and drones at the United Arab Emirates, Saudi Arabia, and Kuwait following the assassination of its security chief, Ali Larijani. Further strikes also targeted Tel Aviv, resulting in casualties.
