Crude jumps after Biden says US discussing possible Israeli strike on Iranian oil facilities

Iran-backed Kataib Hezbollah militia says world would lose 12 million barrels a day if an 'energy war' were to start

A gas flare on an oil production platform in the Soroush oilfields alongside an Iranian flag in July 2005. Reuters

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Global oil prices jumped on Thursday after President Joe Biden said the US is discussing the possibility that Israel will hit Iranian oil facilities in retaliation for Tehran's ballistic missile attack.

A barrel of Brent crude gained 5 per cent to settle at $77.62 after starting the week below $72. It is possibly on track for its biggest weekly gain in nearly two years and a rise in the price of petrol could factor in to the US presidential election on November 5.

After Iran launched about 200 ballistic missiles at Israel on Tuesday night, Israel has vowed to retaliate and some in the US – including Mr Biden – have indicated that the possibility of attacking Iranian oil facilities is on the table.

“We’re discussing that,” Mr Biden said in response to a question about the possibility of such an attack. He added: “I think that would be a little – anyway,” without finishing the thought. The President also said he does not expect Israel to retaliate immediately against Iran.

On Tuesday, Republican Senator Lindsey Graham said Iranian “oil refiners need to be hit and hit hard because that is the source of cash for the regime to perpetuate their terror”.

Pentagon spokeswoman Sabrina Singh said the US is talking to Israel about "what a response to Iran could look like" but declined to give details about potential targets.

In Iraq meanwhile, the Iran-backed Kataib Hezbollah militia said on Thursday that the world would lose 12 million barrels a day if an “energy war” were to start.

“And as Kataib Hezbollah said previously, either everyone enjoys good things or everyone is deprived,” Abu Ali Al Askari, military spokesman for the group, wrote on Telegram.

Iraq is one of the world's leading oil exporters, with production amounting to about 4.4 million barrels per day in 2023, according to data from Statista. Iran produces about 3 million barrels per day.

Kataib Hezbollah has previously been involved in a series of strikes on US forces in the Middle East, including an attack in Jordan that killed three American soldiers.