Iran has launched fresh strikes on energy installations in the Gulf, including a petroleum complex in Bahrain, causing oil prices to soar on fears over supply disruptions due to the Middle East war. The attack on Bahrain’s Al Ma’ameer oil facility resulted in a fire and damage, with the country’s state-owned energy firm Bapco declaring force majeure, a legal clause that excuses the company from fulfilling its contractual obligations.
According to the energy market reports, energy producers in Qatar and Kuwait earlier made similar declarations, citing the ongoing regional conflict in the Middle East. Bapco said it “hereby serves notice of force majeure on its group operations which have been affected by the ongoing regional conflict in the Middle East and the recent attack on its refinery complex”.
Oil Price Surge
Asian stock markets plunged on Monday as oil prices soared, with investors running for cover as crude rocketed to its highest level since the Russian invasion of Ukraine in 2022. The surge in oil prices and the escalating US-Israeli war with Iran hammered airline stocks in Asia on Monday, piling pressure on carriers already navigating tight airspace as travellers scramble to evade the Middle East conflict.
The war has driven up fuel prices, with oil jumping 20% in early trading on Monday, hitting its highest since July 2022, amid fears of tighter supply and prolonged disruptions to shipments. Stranded passengers have been paying huge sums of money to escape the Middle East, with last-minute dashes to the airport, overland trips to less impacted hubs and fighter jets, at times, escorting passenger planes out.
Regional Impact
With most airspace in the region still closed over missile and drone concerns, some people have turned to private jets as charter flights and limited commercial services struggle to evacuate tens of thousands of travellers. The market instability came as Iran continued to target the Gulf with missile and drone barrages, hours after Washington ordered embassy staff to leave Saudi Arabia.
The following are some of the key events that have led to the current situation:
- Iran’s attack on the US embassy in the Saudi capital Riyadh last week
- Drones causing damage at the US diplomatic missions in Kuwait and the United Arab Emirates
- Bahrain’s declaration of force majeure due to the attack on its Al Ma’ameer oil facility
As the situation continues to unfold, it remains to be seen how the global economy will be affected by the rising oil prices and the ongoing conflict in the Middle East.
