U.S., Israel bomb Iran’s largest gas field… oil prices jump [Lee Sang-eun’s Washington Now]

The United States and Israel struck key Iranian energy facilities on the 18th (local time). Iran immediately vowed retaliation. Oil prices surged as concerns grew that a global reduction in energy supplies could become protracted.

According to Iran’s state broadcaster, the U.S. and Israel attacked infrastructure at the South Pars offshore gas field—Iran’s largest natural-gas supply facility—as well as processing facilities in Asaluyeh on Iran’s southwestern coast earlier that morning. South Pars is the world’s largest gas field, and Asaluyeh hosts an industrial complex that refines and processes gas received from the field. This marks the first time in the current war that the U.S. and Israel have attacked Iran’s energy production facilities. The area accounts for roughly 70–75% of Iran’s natural-gas output, most of which has been consumed domestically.

As Israel’s targeted strikes on key Iranian figures continued, following the death the previous day of Ali Larijani, secretary of Iran’s Supreme National Security Council, Information Minister Esmail Khatib was also killed in an explosion on the 18th.

Iran immediately unveiled plans for retaliation. The Islamic Revolutionary Guard Corps (IRGC) announced it would attack energy facilities in Saudi Arabia, the United Arab Emirates (UAE) and Qatar “within the next few hours.” In a statement, a spokesperson for Iran’s Khatam al-Anbiya Central Headquarters warned: “We consider it legitimate to strike the fuel, energy and gas infrastructure of the countries from which the attacks originate, and we will retaliate forcefully when ready.”

Qatar’s state-owned oil and gas company QatarEnergy later said its Ras Laffan energy hub suffered “severe damage” in a missile attack. It did not specify who carried out the strike, but it is widely believed to have been launched by Iran. Qatar is the world’s largest exporter of natural gas, but halted production after the war began and the Strait of Hormuz was blocked.

Not only are exports at a standstill, the energy crisis within the Middle East is also deepening. According to The New York Times (NYT), Iraq’s Ministry of Electricity announced on Wednesday that gas imports from Iran to Iraq had been completely suspended amid continued large-scale attacks on Iran’s oil and gas infrastructure. Iraq is known to have relied on Iran for about one-third of its gas demand to generate electricity.

Oil prices rose immediately. On the New York Mercantile Exchange, West Texas Intermediate (WTI) for April delivery settled up $0.11 (0.11%) at $96.21 a barrel. It climbed as high as $99.40 during the session. That amounts to a gain of more than $4 from the $91.96 low seen in Asian trading. Brent for June delivery surged more than 6% to $109 a barrel. European natural-gas prices also rose about 6%.

Moreover, the rise in oil prices as felt by South Korea is likely to be much larger. That is because WTI is primarily consumed in the U.S., and Brent is primarily consumed in Europe. Dubai crude, which is driven mainly by spot trading, is priced at higher levels. For instance, Dubai crude spot prices had already topped $157 on the 16th. With supplies nearly cut off, price distortions are also becoming pronounced. For South Korean companies, it is a situation that is difficult to assess based solely on WTI or Brent.

Florence Schmidt, an energy strategist at Rabobank, said the new attacks by the U.S. and Israel have “refocused attention on physical, real-world supply,” adding that disruptions to energy supplies “are getting worse by the day.”

Meanwhile, conflicting testimony continues within the U.S. government regarding Iran’s ballistic-missile capabilities—one of the stated reasons for the war. Director of National Intelligence (DNI) Tulsi Gabbard told the Senate Intelligence Committee that if Iran attempts to develop an intercontinental ballistic missile (ICBM), it would only be able to “begin developing” that capability sometime before 2035. This aligns with the resignation the previous day of Joe Kent, the counterterrorism chief, who said Iran “was not an imminent threat.” Gabbard added that determining what is and is not an imminent threat is not the responsibility of the intelligence agencies, and that such assessments rest entirely with the president’s discretion.

Calls for allies to deploy forces to Hormuz are also unfolding in a somewhat confusing manner. The previous day, U.S. President Donald Trump—angered by NATO members’ negative responses to a Hormuz deployment—said “support is not needed,” but this morning he wrote that he wondered what would happen if responsibility for a strait “we don’t even use” were left to the countries that do use it. White House Press Secretary Karoline Leavitt said at a briefing today that the administration remains in contact with European allies about a Hormuz deployment.

Washington=Lee Sang-eun, correspondent selee@hankyung.com