The price of oil and natural gas jumped as escalating attacks in the Persian Gulf threatened long-term damage to major energy facilities.
European gas futures surged as much as 35% to more than double their pre-war level. Brent crude touched $119 a barrel, close to its highest since 2022, and European diesel futures topped $190 a barrel at one point, underscoring the wider inflationary risks from the conflict.
An Iranian missile inflicted “extensive damage” on the Ras Laffan complex in Qatar housing the world’s largest liquefied natural gas plant. Oil loadings on Saudi Arabia’s west coast, a vital export route for the country amid the closure of the Strait of Hormuz, were briefly halted by an attack.
Also, a gas facility in Abu Dhabi was shut after being hit by falling debris from an intercepted strike and two oil refineries in Kuwait were set ablaze by drones.
The attack on Qatar in particular raises the specter of longer-term inflationary pressure from energy prices resulting from the US and Israel’s war on Iran. While oil and gas flows through the Strait of Hormuz could resume once the conflict ends, any badly damaged production facilities in the region could take much longer to recover.
“While we don’t know yet the extent of the damage, we are likely talking about months of repairs,” said Anne-Sophie Corbeau, a researcher at Columbia University’s Center on Global Energy Policy. “In a worst case scenario, Ras Laffan may not restart in 2026.”
President Donald Trump responded by pressing for a de-escalation. He said Israel would refrain from further strikes on Iran’s South Pars gas field — the attack that prompted Tehran’s retaliation against Qatar. However, he also threatened to “massively blow up the entirety” of South Pars if Iran targets Qatar’s LNG facilities again.
Tehran’s response to Israel’s assault on South Pars “is underway and not yet complete,” the semi-official Iranian Students’ News Agency cited a military spokesman as saying on Thursday.
Treasury Secretary Scott Bessent said the US will continue to take steps to add supplies to oil markets. That could include removing sanctions from Iranian crude on that’s already in tankers on the water, and a new unilateral release of emergency reserves, he said in an interview with Fox Business. He reiterated that the US isn’t intervening in derivatives markets.
Photo Credit: Bloomberg
QatarEnergy said several of the LNG facilities inside its Ras Laffan Industrial City were attacked by missiles, “causing sizable fires and extensive further damage.” While shipments from the LNG plant had already been halted earlier this month due to the war, the latest strikes threatened a longer-lasting supply disruption.
Full details of the extent of the damage and the timeline for repairs aren’t yet known. While Asian countries buy most of the LNG shipped from the Middle East, any prolonged disruption to flows would shrink the global supply balance — keeping prices elevated worldwide.
Natural gas futures in the US, also a major exporter of LNG, rose as much as 6.5% on Thursday.
Shell Plc’s Pearl gas-to-liquids plant also sustained damage, the company said. A fire has been extinguished and the facility is in a “safe state” and the extent of the damage is being assessed, according to a statement.
Abu Dhabi shut the Habshan gas facilities after the interception of missiles targeting the plant and an oil field resulted in falling debris. No injuries were reported, the Abu Dhabi Media Office said in a post on X.
“The latest wave of attacks on energy infrastructure in the Gulf just underpins the dire supply outlook from the region for months to come,” said Florence Schmit, energy strategist at Rabobank.
In Kuwait, two oil refineries were struck by drones. A limited fire at an operational unit of the 346,000 barrel-a-day Mina Al-Ahmadi oil refinery has now been extinguished, as has a blaze at the 454,000 barrel-a-day Mina Abdullah refinery, according to state-owned Kuwait Petroleum Corp. and its refining arm Kuwait National Petroleum Co.
A drone fell on Saudi Arabia’s Samref refinery in Yanbu on the western coast, a facility jointly owned by Aramco and Exxon Mobil Corp. A ballistic missile heading toward the port in the region, currently a vital exit route for Saudi Arabia’s oil exports, was intercepted, the kingdom’s ministry of defense said.
Yanbu is critical for Saudi Arabia and the global oil market and Thursday’s attacks mark the first time in this war that it has been targeted by Iran. The kingdom has boosted crude exports from the port after the blockage of the Strait of Hormuz, while Samref is one of the plants the company is relying on to provide fuels like diesel to Europe.
Aramco declined to comment on the status of the refinery and didn’t immediately respond to requests for comment on the port’s status.
Oil has surged more than 50% since the start of the war. More intensive targeting of upstream energy infrastructure, either in Iran or across the wider region, could push prices even higher, according to Rystad Energy A/S.
Disruptions to key infrastructure such as the port of Yanbu could remove 5 million to 6 million barrels a day from the market and potentially push oil prices to $150 or higher, Rystad’s Vice President Aditya Saraswat said in a note on Thursday.
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