Oil and natural gas prices jump following strikes on Middle East energy hubs
By Hanna Ziady, Olesya Dmitracova, CNN
London (CNN) — Oil and natural gas prices spiked Thursday, as Iran ramped up strikes on energy infrastructure across the Middle East and attacked one of the world’s most important liquefied natural gas (LNG) facilities in Qatar.
Brent crude, the global oil benchmark, extended the previous day’s gains, rising more than 6% to above $114 a barrel, having traded even higher earlier in the day. On Wednesday, Brent settled at $107.38, its highest closing level since July 2022. WTI, the US benchmark, was 0.5% up Thursday at almost $96 a barrel.
In Europe, benchmark natural gas prices surged 16.7% on the day, having soared 25% at one point, and have now doubled since the war began on February 28.
QatarEnergy said Wednesday that its Ras Laffan LNG hub had sustained “extensive damage,” after being attacked by Iranian missiles twice in 12 hours. Ras Laffan is the largest LNG facility in the world, according to the International Energy Agency.
The attacks by Iran came after strikes on the Islamic republic’s energy production facilities – the first since the war began and a major escalation in the conflict, which had largely spared Iran’s energy infrastructure. An Israeli strike Wednesday targeted Iran’s South Pars, part of the world’s largest natural gas field, shared with Qatar.
US President Donald Trump, meanwhile, threatened Wednesday night to “blow up” South Pars, critical to Iran’s domestic electricity supply, if attacks on Qatar continued.
The damage to the Ras Laffan hub as a result of the Iranian strikes “fundamentally alters the global gas market outlook,” according to Wood Mackenzie, a data and analytics company focusing on energy and natural resources. In a note Thursday, it said disruption to global natural gas supply was now likely to last longer than two months.
Such a prolonged outage would keep natural gas prices “elevated for longer,” Kristy Kramer, head of LNG strategy at Wood Mackenzie, wrote in the note.
Global LNG supply has already shrunk by almost a fifth since QatarEnergy halted LNG production on March 2, following an earlier Iranian attack on its facilities.
Iran has threatened further attacks across the Middle East, naming Saudi Arabia, Qatar and the United Arab Emirates as likely targets.
Two oil refineries in Riyadh have already found themselves in the midst of attacks, according to Saudi Foreign Minister, Prince Faisal bin Farhan. And on Thursday, the Kuwait Petroleum Corporation said fires had erupted at two of its refineries following drone attacks that targeted the facilities in the early hours and had since been extinguished.
Speaking of Iran’s threats, Aditya Saraswat, senior vice president at Rystad Energy, a research and intelligence company, said Thursday that any such attacks would likely push up oil prices by at least another $10 a barrel.
Attacks on energy infrastructure “would take the war impact beyond control over the Strait of Hormuz,” Mohit Kumar, an economist at Jefferies, a bank, also said in a note Thursday.
Attacks on commercial ships in the Middle East this month have all but closed the vital Strait of Hormuz to tankers. The waterway is ordinarily a conduit for around a fifth of global oil and LNG supply.
This story has been updated.
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