Oil Prices Surge Near $110 Following Iranian Airstrike on Gas Field

Oil prices leapt to nearly $110 a barrel after Iranian media reported an airstrike hitting a facility on the world's largest natural gas field, South Pars.

The Brent crude oil benchmark hit $109.91 a barrel just after 14:30 GMT, more than 5% higher than Tuesday's prices, remaining above $108.

This surge followed reports from Tasnim, a news agency affiliated with the Islamic Revolutionary Guard Corps (IRGC), asserting that Iran's petrochemical complex on the South Pars gas field had been struck.

The benchmark UK gas price similarly jumped by 6% to 143.53p a therm, before retracting slightly below the 140p mark.

Despite the spike in oil and gas prices, they remained below the highs reached earlier in the ongoing conflict. Oil had peaked at $116.78 a barrel on 9 March, while UK gas was at 162.55p a therm on 3 March.

Iran's oil ministry announced that a fire at the petrochemical complex is under control, though the extent of the damage remains uncertain. Following the airstrike, Iran’s military warned of “decisive action” in retaliation against what they described as attacks on their energy infrastructure.

The military's statement indicated that any aggression against Iran’s economic foundations would lead to severe counterattacks. Additionally, Iran has suspended the flow of gas to Iraq to bolster its domestic supplies, as approximately 94% of Iran's gas is consumed internally.

Qatar, also involved in the South Pars field operations, highlighted that strikes on energy infrastructure pose a threat to global energy security.