A day after oil and gas prices surged due to multiple attacks on energy facilities in the Gulf region amid the United States-Israel war over Iran, several European countries and Japan issued a joint statement saying they would take steps to stabilize energy markets.
The leaders of Britain, France, Germany, Italy, the Netherlands and Japan issued a joint statement Thursday expressing their desire to “contribute to appropriate efforts to ensure safe passage through the Strait of Hormuz.”
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He did not specify what those efforts might include, but urged “an immediate comprehensive halt to attacks on civilian infrastructure, including oil and gas installations.”
In an effort to combat rising global energy prices, the International Energy Agency (IEA) last week authorized a coordinated release of its members’ strategic petroleum reserves, the largest in its history. “We will take other steps to stabilize energy markets, including working with some producing countries to increase production,” the statement said.
The war has hit markets since the start of the war on Feb. 28, after Tehran attacked sites across the Gulf and effectively closed the Strait of Hormuz, through which a fifth of global oil and gas flows.
European leaders have rejected United States President Donald Trump’s demand to help ensure freedom of navigation in the Gulf’s key oil chokepoint by deploying warships as part of a naval alliance.
Thursday’s joint statement came ahead of a long-scheduled White House meeting between Trump and Japanese Prime Minister Sanae Takachi, aimed at boosting the decades-old security and economic partnership between Washington and its closest East Asian ally.
US Treasury Secretary Scott Besant said ahead of the meeting on Thursday that he expected Japan, which supplies 95 percent of its crude from the Gulf, would want to ensure its supplies were secure.
Takaichi has sought to move Japan away from the pacifist constitution imposed by Washington after World War II, but because the Iran war is unpopular domestically, he has not yet offered assistance in clearing the Strait of Hormuz.
The Japanese prime minister told parliament on Monday that Tokyo had not received any official request from the US but was examining the scope of possible action within the limits of its constitution.
rising energy prices
Major economies are struggling to cushion the impact of rising energy prices after Iranian forces virtually closed the Strait of Hormuz.
Concerns grew further on Wednesday when Iran attacked Qatar’s Ras Laffan industrial city, the world’s largest liquefied natural gas (LNG) facility, in retaliation for an Israeli attack on its South Pars gas field.
QatarEnergy reported “extensive damage” from Iranian missiles at Ras Laffan, which produces about 20 percent of the world’s LNG supply and plays a major role in balancing Asian and European markets’ demand for the fuel.
Company CEO Saad al-Kaabi said Iran’s attacks had damaged the facilities, which produce 17 percent of QatarEnergy’s LNG exports, and would take three to five years to repair.
Qatar’s Prime Minister Mohammed bin Abdulrahman bin Jassim Al Thani said Iran’s claims that it is targeting US bases are “unacceptable and unfair”, as the attack on Ras Laffan shows it is targeting energy infrastructure that is vital to Qatar and the entire world.
Energy prices have surged and stocks have sunk amid prolonged instability in the region, rekindling fears over global supply and inflation as well as potential damage to economic growth.
European gas prices rose 25 percent at 13:00 GMT on Thursday and Brent crude oil futures rose nearly 6 percent to $113, after rising nearly 10 percent. European gas prices have risen more than 60 percent since the war began on February 28.
James Meadway, co-director of the Verdant economic policy think tank, said it would not be a “temporary decline” in oil and gas prices.
“In addition to the Strait of Hormuz being blocked, we now have serious disruption to basic oil and gas production,” Meadway told Al Jazeera.
“At this point, it looks like there will be significant price increases across the board.”
