Oil and Gas Jump as Iran Strikes Gulf Energy Infrastructure
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Some of the best lessons don't come from a classroom. They come from experience. On The Power of Advice, a new podcast series from Capital Group, you'll hear from CEOs, investors, and founders about how they built careers, took risks, and reinvented themselves. If you're starting your own journey, this is the kind of advice you won't want to miss. Available wherever you get your podcasts. Published by Capital Client Group, Inc. European gas prices surge more than 20% after Iran strikes the world's largest LNG plant. Plus, Israel digs in for a protracted fight in Lebanon. It definitely raises the stakes. Another large-scale Israeli military operation in Lebanon could lead the country to spiral into civil conflict at a sensitive time.
And U.S. shoppers hunt for bargains in a boost for discount retailers. It's Thursday, March 19th. I'm Luke Vargas for The Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. Iran is dialing up its attacks on Gulf energy facilities a day after Israel struck a vital Iranian gas field. Qatar is reporting extensive damage to a major gas hub. Kuwait says that two of its refineries are ablaze after drone attacks. And a Saudi official says that a refinery outside of the capital Riyadh was hit by a ballistic missile late yesterday, generating a massive fireball. Following the attacks, Brent crude futures are sitting north of $116 a barrel this morning, an 8 percent jump.
U.S. gasoline prices have climbed a further four cents overnight, according to AAA. And European natural gas prices have surged more than 20 percent, as traders assess that the Iran war has entered a new and even more volatile phase. Editor Peter Landers has been overseeing the journal's Iran live blog overnight from Singapore. Peter, I think we suspected yesterday the Israeli attack on Iran's South Pars gas field was going to trigger some sort of major reaction. And boy, we have now seen that. And we've even heard from President Trump overnight now warning on social media that while he doesn't want to do it, he would just blow up that Iranian gas field if they dared to attack Qatar again. That's right.
This is a new stage of the war where core energy facilities on both sides are being attacked. It's definitely the question going forward, is there going to be a cycle of escalation where each one attacks even more facilities on the other side? And I think what the real gist of President Trump's message was, that he does not want to see that cycle of escalation. He's saying he did not know about the Israeli attack ahead of time. Some Wall Street Journal reporting suggests that he did know and that Israel did tell the U.S.
What recent event caused a surge in European gas prices?
that this was coming. But whatever he might have known or not known, he's saying, let's hold it back now. We don't expect further Israeli attacks on those Iranian facilities. And he expects that Iran will likewise hold back from repeating what it did to Qatar. Well, I already highlighted, Peter, some of the commodity price movement that the fighting yesterday and overnight has triggered. But, you know, this is certainly relevant in Asian markets. This is cropping up in equities now, too. Right. Japan's Nikkei average is down sharply again today. We've seen markets in places like Japan and South Korea really gyrate over the last couple of weeks as the war develops because these Asian economies are so dependent on oil and gas imports from the Middle East, from places like Qatar, the natural gas field there.
You already see production, for example, of ethylene in Japan being curtailed because some of the feedstock is less available or is so costly that they can't reasonably manufacture some of these chemical products. And Peter, there are similar pressures in Europe, right, with it looking all but certain now that these two continents are going to be basically bidding against each other for potentially limited energy supplies in the months to come. That's right. They're both the importers and they both, as you said, need to compete for these supplies.
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