Two Iranian drones halt 20% of global liquefied natural gas production

Qatar has suspended liquefied natural gas (LNG) production after two Iranian drones struck energy facilities operated by state-owned QatarEnergy.

Source: Reuters

Details: The Qatari government said two Iranian drones hit a QatarEnergy facility and that authorities are assessing the scale of damage. The country's LNG production accounts for roughly 20% of global supply.

The Gulf state is the world's second-largest LNG exporter after the United States and plays a key role in balancing demand in Asian and European markets. Asian customers account for 82% of QatarEnergy's client base.

The wave of attacks in the Middle East entered its third day and also led to the suspension of most oil production in Iraqi Kurdistan and the closure of several major Israeli gas fields, limiting exports to Egypt.

Saudi Arabia has also halted operations at its largest oil refinery following a drone strike, a source familiar with the matter said.

The Ras Tanura refinery operated by state-owned Saudi Aramco, with a capacity of 550,000 barrels per day, was shut down as a precaution. It is part of a major energy complex on the kingdom's Gulf coast and serves as a critical export terminal for Saudi crude oil.

Oil prices surged by as much as 13% intraday to above US$82 per barrel, the highest level since January 2025, as the conflict nearly halted shipping through the Strait of Hormuz, which handles a fifth of global oil supplies.

Background:

• Israel and the US struck Iran and Lebanon's Hezbollah on the morning of 28 February.
• Iran then attacked Bahrain and the United Arab Emirates and blocked the Strait of Hormuz, the main conduit of Middle Eastern oil supplies.
• As a result, the price of Brent crude jumped by 13% to above US$82 per barrel and oil markets are now bracing for prolonged volatility and persistent disruptions in the operation of the Strait of Hormuz.
• The Ras Tanura refinery in Saudi Arabia ceased operations following an Iranian drone attack.
• In the port of Bahrain, the US-flagged tanker Stena Imperative was attacked, sparking a fire on board, though no crew members were injured.

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