Key Moments
- Oil prices surge, with Brent rising above $114 as tensions escalate.
- European gas prices jump nearly 17%, doubling since late February.
- Damage to Qatar’s Ras Laffan hub raises supply concerns.
Energy Prices Rise on Conflict
Global energy markets moved sharply higher on Thursday as tensions in the Middle East intensified, with key infrastructure coming under attack. Traders reacted quickly to the growing risk of prolonged supply disruptions.
Brent crude climbed more than 6% to trade above $114 per barrel, extending gains from the previous session, which marked its highest close since mid-2022. US benchmark WTI hovered near $96 per barrel, posting smaller gains.
Gas Prices Surge on Supply Fears
European natural gas prices spiked nearly 17% during the session, after briefly surging as much as 25%. Prices have now doubled since the conflict began in late February, reflecting tightening supply conditions.
The rally comes as disruptions to LNG exports deepen, particularly following damage to major facilities in Qatar.
Qatar LNG Hub Suffers Damage
QatarEnergy reported significant damage to its Ras Laffan complex after multiple strikes within a short period. The site is the world’s largest LNG export facility, making it critical to global energy supply.
Production had already been reduced earlier in March, contributing to a notable drop in global LNG availability. Estimates suggest supply has fallen by nearly 20% since operations were first disrupted.
Strikes Spread Across Region
The conflict has widened, with energy infrastructure increasingly targeted. Iran’s South Pars gas field, part of the world’s largest natural gas reserve, was also struck, marking a major escalation.
Additional threats have been directed at key producers including Saudi Arabia, the UAE, and Kuwait. Reports indicate that refineries in Riyadh and facilities in Kuwait have already been hit, though fires were later contained.
Hormuz Disruptions Add Pressure
The Strait of Hormuz, a vital route for global energy shipments, has seen major disruptions. The passage typically handles about 20% of global oil and LNG flows, but recent attacks have largely halted tanker traffic.
This has intensified concerns over supply bottlenecks, adding further upward pressure on prices.
Outlook: Prices May Stay Elevated
Analysts warn that damage to key infrastructure could have lasting effects on global markets. Extended outages may keep gas prices elevated, while continued escalation could push oil even higher.
Some forecasts suggest further attacks could add another $10 per barrel to oil prices, depending on how the situation develops.
Markets are expected to remain highly sensitive to geopolitical developments, with volatility likely to persist in the near term.
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