Hassan Ghaedi/Anadolu via Getty Images
- Iran attacked a Qatari LNG site, spiking oil and gas prices amid supply disruption fears.
- Oil prices soared past $110 per barrel, and Europe’s benchmark gas prices surged 6%.
- Qatar condemned Iran’s attack on Ras Laffan, calling it a threat to regional stability.
Oil and natural gas prices jumped after Israel struck a natural gas processing facility in southwestern Iran, and Iran retaliated by attacking a major liquid-natural-gas complex in Qatar, escalating fears over energy supply disruptions.
International benchmark Brent crude oil futures rose as much as 5.1% to $112.86 a barrel in early Asian trade on Thursday. US West Texas Intermediate crude climbed 3.8% to $100.02 a barrel.
US natural gas futures surged 6.3% to $3.26 per metric million British thermal unit.
European natural gas futures are set to open higher after further escalation overnight, wrote commodities strategists at ING bank.
On Wednesday, Israel struck Iran’s South Pars gas field, which is an offshore facility that Iran shares with Qatar, and is the largest such facility in the world. Shortly after, Iran struck Ras Laffan Industrial City — home to the world’s largest liquefied natural gas export plant, which accounts for nearly one-fifth of global LNG trade.
The move follows prior warnings from Tehran about potential strikes on Gulf energy infrastructure, rattling markets already sensitive to geopolitical risk and raising concerns about further volatility in global energy supplies.
Qatar’s Interior Ministry wrote on X on Wednesday that Civil Defense crews were tackling a fire at Ras Laffan Industrial City, a critical natural gas hub for the country’s economy, “following an Iranian targeting.”
The Foreign Ministry of Qatar said in a statement that the strike marks “a dangerous escalation, a flagrant violation of state sovereignty, and a direct threat to its national security and regional stability.”
On Wednesday night, President Donald Trump said on Truth Social that the US “knew nothing about this particular attack” on Iran’s South Pars Gas Field. He said that barring a strike by Iran, Israel would not attack the South Pars gas field. But should Iran attack, the US would “massively blow up the entirety of the South Pars Gas Field.”
Crude futures pared some gains after Trump’s comments but remained at elevated levels as traders priced in fresh risks from the escalation of events.
“Damage to the LNG facilities means that the troubles for global gas markets aren’t just about when flows through the Strait of Hormuz resume, but how long repair work at the sites might take,” wrote ING’s strategists.
Even if the LNG facilities are largely untouched, the market will have to price in a higher risk premium because of the growing threat to Middle East energy infrastructure, the ING analysts added.
The latest developments in the conflict suggest it has entered a new phase, wrote Vishnu Varathan, Mizuho’s head of macro research for Asia, excluding Japan.
Risks are shifting “from temporary disruptions to more lasting capacity destruction impairing the production and passage of oil and gas,” Varathan wrote in a Thursday note.
That could keep oil and gas prices higher for longer as expectations of a ceasefire fade, he added.