Manny Ita –
Oil prices jumped sharply as Iranian missile strikes damaged a major liquefied natural gas export facility in Qatar, stoking fears of a broader supply disruption. The strikes followed Tehran’s warnings to target energy infrastructure in Qatar, Saudi Arabia, and the United Arab Emirates after Israel bombed a natural gas processing facility in Iran.
Brent crude May futures rose 4% to $111.80 as of 8:45 p.m. ET, while U.S. West Texas Intermediate futures for April gained more than 3% to $99.47. Iranian missile strikes inflicted “extensive damage” on Ras Laffan Industrial City, the world’s largest LNG export facility, Qatar said. Emergency crews were dispatched to tackle fires at Ras Laffan, QatarEnergy said in a social media post, adding that no casualties were reported. Qatar’s Interior Ministry later confirmed the blaze had been brought under control.
Qatar’s foreign ministry condemned the attacks as a “dangerous escalation” and a “flagrant violation of sovereignty,” warning that the strikes threatened national security and regional stability. The ministry added that Qatar reserves the right to respond under international law. Saudi Arabia and the United Arab Emirates remained on high alert after Israel struck an Iranian natural gas processing facility.
Qatar had already suspended LNG production on March 2 following Iranian drone attacks on Ras Laffan and Mesaieed Industrial City. The country is the world’s second-largest LNG exporter after the United States, accounting for nearly a fifth of global shipments, according to Kpler.
Gulf Oil’s senior energy advisor Tom Kloza warned that markets could enter an “all bets are off” scenario if the conflict spreads beyond the Gulf and begins targeting energy infrastructure in Europe or the United States. “Can you imagine the response in the world if [Iran] targeted something outside of the Persian Gulf, a refinery in Rotterdam or a facility somewhere in the United States, that’s when all bets are off and prices could go absolutely apocalyptic,” he said.
Dan Pickering, founder and CIO of Pickering Energy Partners, said the situation could escalate from a supply chain problem to an actual supply problem. “If you start changing the ability to produce, whether it’s LNG or oil, and all of a sudden you can’t move the same amount of volumes because the volumes aren’t there … This is an escalation,” he said.
The attacks on Middle East energy infrastructure threaten to deepen the supply shock already triggered by the Iran conflict. Tanker movement through the Strait of Hormuz, which handles about 20% of global oil supplies, is largely blocked. Analysts warn that continued disruptions could trigger extreme volatility in oil and gas prices as traders price in worst-case scenarios and scramble to secure supplies.
