Iran Steps Up Attacks On Tankers & Facilities As Oil Surges

Oman's key oil export terminal was evacuated and two crude tankers were hit in Iraqi waters, as risks to global energy supply from the Middle East war deepened. Ships were ordered to leave the port of Mina Al Fahal in Oman as a precautionary measure, according to people who directly received a notice from a port agent. The attacks on the vessels off the coast of Iraq also prompted the nation's oil terminals to suspend operations. he latest developments point to an increase in retaliatory attacks from Iran, adding to pessimism that the war will persist for longer. Our EMEA News Director Will Kennedy joined Stephen Carroll and Caroline Hepker on Bloomberg Radio to discuss. The Iran war is causing unprecedented turmoil in oil markets, hitting 7.5% of global supply and an even bigger swath of exports, the International Energy Agency said.

“The war in the Middle East is creating the largest supply disruption in the history of the global oil market,” the IEA said in its monthly report on Thursday. The previous day, its members agreed to release an unprecedented 400 million barrels from emergency reserves to counteract the chaos. The most immediate impact of the war on energy markets is the closure of the Strait of Hormuz, choking off oil and gas flows through the trade artery. With Gulf producer giants forced to cut output because they can’t export from the region, the conflict is eroding a global oil supply glut. It also means the effects will be felt well beyond when the waterway is reopened.

The IEA estimates that the war will slash global oil supply by 8 million barrels a day this month, or almost 250 million barrels in total. Flows through the strait, through which 20 million barrels of crude and products passed last year, are down by more than 90%, the IEA estimates.

READ: Gulf Oil Giants Deepen Cuts as Hormuz Halt Chokes Exports

The resulting price surge, flight cancellations and economic uncertainty are also taking a toll on demand, the agency said, cutting its estimates for global consumption growth this year by roughly 25% to 640,000 barrels a day. That’s the lowest since it introduced forecasts for 2026 last April.

Brent crude climbed back above $100 a barrel in London on Thursday as two crude tankers were hit in Iraqi waters and Oman’s evacuated its key oil export terminal. There have been ongoing attacks on commercial shipping in the region since the war began.

Rivals Boost

While Saudi Arabia and the United Arab Emirates can divert some of their barrels on alternative routes, the effective closure of the strait has forced producers around the Gulf to collectively shutter roughly 10 millions of daily production, according to the agency.

The supply shock has pared the IEA’s projections for a global surplus in 2026 by just over a third to about 2.4 million barrels a day.

Before the crisis, the IEA projected a record oil glut for this year as swelling supply from across the Americas — driven the US, Canada, Guyana and Brazil — exceeded growth in consumption.

Output losses in the Middle East are being tempered by higher output from producers outside of the Organization of the Petroleum Exporting Countries and its partners, as well as increases by OPEC+ members Kazakhstan and Russia, the IEA said.

The effective closure of Hormuz also jeopardizes about 4 million barrels a day of regional refining capacity, the agency said. Constraints on the availability of feedstock limits the ability of other regions to offset the squeeze, posing particular risks for supplies of diesel and jet fuel.

On Wednesday, IEA Executive Director Fatih Birol announced that the agency’s members — which consist of 32 OECD nations — would draw 400 million barrels from emergency reserves. Key details on the pace and duration of the planned releases weren’t specified.

US Energy Secretary Chris Wright said the country would deploy 172 million barrels of this from its Strategic Petroleum Reserve, though it will take about 120 days to fully deliver.

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