Stocks fall, oil prices rise as Iran threatens Gulf energy sites

Stocks fell and oil prices jumped on Wednesday as oil facilities across the Gulf were forced to evacuate after Iran warned countries around the Persian Gulf that a number of energy assets were now "legitimate targets" following Israel’s attack on the South Pars gas field.

According to Bloomberg, citing Iran’s semi-official Tasnim news agency, facilities in Qatar, Saudi Arabia and the United Arab Emirates are on a list of assets at risk of missile strikes, with Iran cautioning that strikes would occur "in the coming hours".

The facilities being targeted are Saudi Arabia’s SAMREF refinery and Jubail petrochemical complex, the UAE’s Al Hosn gasfield and Qatar’s Ras Laffan refinery and Mesaieed petrochemical complex.

Oil prices rose on the news and by 1600 GMT, Brent crude was up 5.4% at $109.04 a barrel and West Texas Intermediate was 2.6% higher at $98.71.

Stocks reversed earlier gains to trade sharply lower, with the FTSE 100 down 1.1% and benchmark Stoxx 600 index down 0.9%.

Kathleen Brooks, research director at XTB, said: "The risk is that an oil shipping crisis is morphing into an oil supply crisis. Unsurprisingly, this has spooked a market that was willing to grasp hopeful signs that tankers were slowly getting through the Strait of Hormuz, and that countries like Saudi Arabia and Iraq could get oil into the market through alternative routes."

Danni Hewson, head of financial analysis at AJ Bell, said the Iranian threats of retaliation against regional energy infrastructure "have helped dial up the temperature once again and put renewed upward pressure on oil prices".

"Any solution to the blockage of the Strait of Hormuz looks pretty distant at this point and unless and until there is progress on that front, energy markets will likely remain volatile," she added.

Earlier in the day, oil prices had eased back on reports that Iraq had resumed crude exports to Turkey’s Ceyhan port, as the Middle East producer looks to bypass the stricken Strait of Hormuz. According to multiple reports, crude is now being transported from Iraq’s Kirkuk oil fields to Ceyhan via pipeline after Baghdad, the Kurdistan Regional Government and Ankara struck deals to enable flows to restart.