Europe, Japan ready to help steady energy prices, secure chokepoint
By Our Reporter European powers and Japan said yesterday they would act to stabilise energy markets and join “appropriate efforts” to open the Gulf’s energy chokepoint after tit-for-tat strikes on
By Our Reporter
European powers and Japan said yesterday they would act to stabilise energy markets and join “appropriate efforts” to open the Gulf’s energy chokepoint after tit-for-tat strikes on energy plants dramatically escalated the U.S.-Israeli war on Iran.
Countries have been scrambling to cushion the impact of soaring energy prices after Qatar reported “extensive damage” from Iranian missile strikes on Ras Laffan Industrial City in response to Israel’s bombing of Iran’s major gas field. Ras Laffan processes about a fifth of the world’s liquefied natural gas.
Saudi Arabia’s main port on the Red Sea, where it has been able to divert some exports to avoid Iran’s closure of the Gulf’s exit point, the Strait of Hormuz, was also attacked.
The strikes underscored Iran’s continued ability to exact a heavy price for the U.S.-Israeli campaign, and the limits of air defences in protecting the Gulf’s most valuable and strategic energy assets.
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As no end is in sight almost three weeks into the war, and the threat of a global “oil shock” growing by the day, Britain, France, Germany, Italy, the Netherlands and Japan issued a joint statement expressing “our readiness to contribute to appropriate efforts to ensure safe passage through the Strait”.
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They also promised “other steps to stabilise energy markets, including working with certain producing nations to increase output”.
The statement offered no details, but marked a significant shift after weeks of resistance by major U.S. allies to U.S. President Donald Trump’s demands they help secure the strait, intervening in a conflict with unclear objectives that they did not seek and over which they have little control.
In particular, Israel’s bombing of Iran’s South Pars gas field, which Trump said the U.S. had not known about, suggested gaps in coordination of strategy and war aims between the main protagonists.
U.S. Defence Secretary Pete Hegseth told a briefing yesterday that U.S. objectives in the war were “unchanged, on target and on plan”.
But Director of National Intelligence Tulsi Gabbard told the House intelligence committee that U.S. and Israeli goals differed:
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“...The Israeli government has been focused on disabling the Iranian leadership. The president has stated that his objectives are to destroy Iran’s ballistic missiles launching capability, their ballistic missile production capability, and their navy.”
QatarEnergy’s CEO told Reuters the Iranian attacks had knocked out a sixth of Qatar’s LNG export capacity, worth $20 billion a year, and that repairs would take three to five years.
Brent crude oil futures were up nearly 4.5% at $112 at 1430 GMT, having surged up to 10% before the joint statement. European near-term gas prices were up more than 15%, and have leapt by over 60% since the war began.
Fears of lasting inflation pressures encouraged both the European Central Bank and Bank of England to hold rates steady, and investors who once expected cuts were pricing in hikes by year-end. The ECB now sees 2026 inflation at 2.6%, above the 1.9% predicted in December.
At a summit in Brussels, European Union leaders sought ways to offset higher energy costs for industries and consumers already struggling with the rising cost of living.
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Iranian attacks since Wednesday have also forced the UAE to shut its Habshan gas facility and set off fires at two Kuwaiti oil refineries.
Perhaps just as significantly, Saudi Arabia intercepted a ballistic missile heading for Yanbu, the port city that is the kingdom’s only outlet for crude exports since Iran in effect closed the Strait of Hormuz, through which around a fifth of the world’s crude oil and liquefied natural gas normally passes.
Israeli media reported that an Iranian strike hit oil facilities in Israel’s port of Haifa, causing damage but no casualties.
Iran’s military said strikes on Iran’s energy infrastructure had led to “a new stage in the war” in which it had attacked energy facilities linked to the United States.
“If strikes (on Iran’s energy facilities) happen again, further attacks on your energy infrastructure and that of your allies will not stop until it is completely destroyed,” spokesman Ebrahim Zolfaqari said, according to state media.
