$120 oil signals supply shock: by Oil & Gas 360

Core Insights - Global energy markets are experiencing significant disruptions due to attacks on critical infrastructure in the Middle East, leading to actual supply losses rather than just risk premiums [1][4][7] Group 1: Market Reactions - Brent crude oil prices have surged to around $119 per barrel, indicating a market increasingly focused on physical disruptions rather than geopolitical headlines [3][7] - European gas prices have increased by as much as 35%, highlighting the region's reliance on LNG following the reduction of Russian pipeline flows [6] Group 2: Infrastructure Attacks - Coordinated drone attacks have led to refinery shutdowns in Gulf states, with significant impacts on production and export capacities in Iraq, UAE, and Saudi Arabia [4][5] - An Iranian strike on Qatar's Ras Laffan industrial complex has disrupted a major LNG supply hub, affecting approximately 20% of global LNG trade [5] Group 3: Supply Dynamics - The energy market is transitioning from a "risk premium" phase to a "supply loss" phase, indicating a more serious and sustained impact on supply [7][8] - The current market is characterized by limited spare capacity, meaning that ongoing disruptions could keep prices elevated without needing a complete shutdown of supply routes [9]