Energy and fertiliser prices spike in wake of attacks on Iran

The prices of oil and gas on global energy markets are significantly higher in the wake of the weekend’s events in the Middle East.

Oil traded around 7% higher at $77.50 (€66.10) per barrel. European gas futures jumped more than 20% in early trading.

OPEC, the global organisation of oil-exporting nations, announced on Sunday that it would expand production by 206,000 barrels per day, but it is unclear whether the capacity is in place to meet that target.

For Irish farmers, the biggest concern will be around the effects on fertiliser prices.

Iran is one of the world’s largest producers and exporters of urea, with other countries in the region such as Saudi Arabia and Qatar also producing the product.

Iran is facing risks to its infrastructure from the US and Israeli attacks, while exports from the region will likely be caught up in any disruption to the key shipping route through the Strait of Hormuz.

There are early signs that urea prices are already rising in Egypt, another major producer in the region. While the country is not directly involved in the conflict, it does rely on gas imports from Israel for some of its production.

In previous episodes where Iran was attacked, the spikes in commodity prices proved to be short-lived. However, with the killing of Iran’s leader and US indications that it will continue the attacks for “weeks”, that may not be the case this time.