Gas prices in EU surge 50% in one day after Iran's attack on Qatar – Bloomberg

Artur Kryzhnyi — 2 March, 18:34

Gas prices in Europe have surged after production was halted in Qatar. Photo: Getty Images

Qatar has halted liquefied natural gas production at the world's largest export facility following an Iranian drone attack, sending European gas prices up by more than 50% and shaking global energy markets.

Source: Bloomberg

Details: The Ras Laffan plant operated by QatarEnergy accounts for around a fifth of the global LNG supply, and the shutdown now threatens energy security worldwide.

European gas futures had their biggest jump since the 2022 energy crisis after QatarEnergy confirmed the suspension of production on Monday. Meanwhile, tankers have largely stopped transiting the Strait of Hormuz – a critical artery for global fuel supplies.

European gas surged to its highest level in a year

Infographic: Bloomberg

Although most LNG from the Middle East is purchased by Asian countries, any disruption is likely to intensify competition for alternative supplies, pushing prices higher globally, including in Europe.

Gas prices in Europe are rising against the backdrop of unusually low storage levels, with the region needing to import significant volumes of LNG over the summer to replenish reserves ahead of next winter.

Although the intraday spike was the largest since the start of Russia's full-scale invasion of Ukraine four years ago, benchmark prices are only at a one-year high, as regional supplies have not been directly disrupted and traders are still assessing how long the conflict may last.

According to people familiar with the matter, the company has declared force majeure on its LNG supply contracts with customers.

Background:

On the morning of 28 February, Israel and the United States carried out strikes on Iran and the Lebanese group Hezbollah.
Following that, Iran attacked Bahrain and the United Arab Emirates and blocked the Strait of Hormuz, the main artery for Middle Eastern oil supplies.
On Monday, 2 March, at the opening of trading, Brent crude prices jumped 13% to above US$82 per barrel, and oil markets are bracing for prolonged volatility and ongoing disruptions to shipping through the Strait of Hormuz.
The Ras Tanura oil refinery in Saudi Arabia ceased operations after an Iranian drone strike.
In the port of Bahrain, the US-flagged tanker Stena Imperative was attacked: a fire broke out on board, but crew members were not injured.
Qatar suspended LNG production after two Iranian drones struck energy facilities operated by the state-owned QatarEnergy.

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