Following strikes on the Qatar hub, gas prices jump by 25%.

Following further strikes on Middle Eastern energy infrastructure, particularly Qatar’s main gas facility, oil and gas prices have skyrocketed.  Early trade saw a roughly 25% increase in gas prices on wholesale markets in the UK and Europe, followed by a minor decline. Gas prices in Europe have more than doubled since the start of the US-Israeli war with Iran.

Additionally, oil prices are rising; at one point, Brent crude jumped 10% to above $119 per barrel before declining.Gas prices in the UK have increased by almost 25% to nearly 175p per therm. The increase follows Wednesday night’s attack on Iran’s South Pars gas complex, one of the biggest natural gas reserves in the world.

In retaliation, Iran attacked a significant LNG export facility in Qatar, causing “extensive damage” and raising questions about the world’s energy supplies. Following allegations that Israel attacked Iran’s petrochemical complex on the South Pars gas field, the strikes on Ras Laffan took place.  As investors grow more worried about the possible economic effects of a protracted battle, the most recent news shook global markets. 

On Thursday morning, the Nikkei share index in Japan was down 3.4%, while the FTSE 100 in London was down 1.7%.The Economist’s commodities editor, Matthieu Favas, described the increase in gas prices as “huge”.

“This is on account of the attack of the gas facility in Qatar, which was offline, but the hope would be that it would be restarted within weeks, but the attack now – several missiles aimed at this facility, one of them hitting directly – makes it clear that this is unlikely to happen.

“This could last months and these facilities provide a fifth of the global supply of liquid natural gas, which is why the market is reacting the way it is now, it’s pricing in long-lasting disruption.”

However, he said prices were still a long way off the peaks seen in the aftermath of Russia’s invasion of Ukraine. Iran’s military had warned it would take “decisive action” in response to the strike on its energy infrastructure.

“As previously warned, if the fuel, energy, gas, and economic infrastructures of our country are attacked by the American-Zionist enemy, in addition to a powerful counterattack against the enemy, we will severely strike the origin of that aggression as well,” the military said in a statement published by Tasnim, a news agency affiliated with the Islamic Revolutionary Guard Corps.

“We consider targeting the fuel, energy, and gas infrastructures of the countries of origin legitimate and will retaliate strongly at the earliest opportunity.”

On the gas field, which it refers to as North Dome, Qatar also runs facilities. However, due to the conflict, the nation, which generates one-fifth of the world’s liquefied natural gas, had stopped production earlier in March.  After the strike on the South Pars gas field, Iran mentioned Ras Laffan as one of its potential targets. 

The interior ministry of Qatar announced that it had “initially brought the fire in Ras Laffan under control, with no injuries reported” just after 19:00 GMT on Wednesday.