Oil prices rise 13% after Iran attack

No major energy assets targeted yet

- REBECCA F. ELLIOTT

An oil tanker anchored near Oman was ablaze on Sunday, in this photo taken from video.

(REUTERS)

Oil prices rose as much as 13% as markets opened on Sunday evening, underscoring the economic risks of the widening conflict in the Middle East.

The US-Israeli attacks on Iran could severely restrict supplies from a key oil and gas-producing region. Even if the disruption is brief, it will almost certainly make energy more expensive worldwide. The magnitude of those price increases and how long they last will depend on what the United States and Israel do next —and how Iran responds.

International oil prices had already climbed about 20% this year, nearing $73 a barrel on Friday. On Sunday, they briefly crossed $82 a barrel before retreating.

The longer that the war disrupts the energy trade, the bigger the risk that consumers will face higher prices, not just at the petrol pump but in a broad array of products, at a time when many people are already worried about the economy. That could cause domestic political blowback for President Trump, whose approval ratings have tumbled in part because many Americans are concerned about inflation.

By Sunday, the flow of tankers carrying energy products through the Strait of Hormuz, a narrow waterway off Iran's southern coast, had slowed to a trickle. About one-fifth of the world's oil and a significant amount of natural gas usually pass through the choke point daily.

But in a crucial sign for oil markets, no major energy assets in the region appeared to have been struck as of late Sunday in Iran.