LNG prices in Europe surged more than 50% after Qatar shut down production at the world’s largest export facility following an Iranian drone attack. The unprecedented halt marks a dramatic escalation of the Iran war, threatening energy security worldwide.
European benchmark gas futures jumped the most in nearly four years, after QatarEnergy confirmed output had been suspended. Tankers had largely stopped transiting the Strait of Hormuz, a critical artery for global fuel shipments.
The Ras Laffan plant supplies about a fifth of global LNG supply, risking the most serious shock to gas markets since Russia’s invasion of Ukraine four years ago.
Asian countries buy most of the LNG shipped from the Middle East, any disruption increasing competition for alternative supplies, pushing up prices worldwide, including in Europe.
Shipping risks compound the disruption, with more than half of the world’s largest maritime insurance clubs stopping war-risk cover for vessels entering the Persian Gulf.
Israel ordered the temporary closure of some gas-producing capacities, prompting major importer Egypt to seek more LNG cargoes. Gas trade disruptions in the Middle East could eventually raise spot LNG demand from Turkey.
