Gas field hits in Iran and Qatar scramble markets

• Brent up 4.6%, WTI gains 1.2%
• European natural gas jumps 6%
• QatarEnergy says LNG facilities attacked

Crossfire over one of the world’s largest gas fields, shared by Iran and Qatar, sent crude prices soaring on Thursday. 

Debris from intercepted Iranian missiles also hit the Habshan gas facilities and Bab oilfield in the UAE, with the former suspending operations, according to the Abu Dhabi Media Office.

Brent crude traded at $112.17 a barrel, up 4.6 percent, at 05:00 GMT, while West Texas Intermediate crude rose 1.2 percent to $97.43.

On Wednesday, Brent closed up 3.8 percent on news that Israel had struck Iran’s South Pars reservoir and that the Islamic Republic retaliated against Ras Laffan Industrial City facilities linked to Qatar’s North Field. 

The spread between Brent crude, which originates in the North Sea and is considered the international standard, and US-focused WTI came to more than $10 per barrel.

A Dutch benchmark for European natural gas jumped more than 6 percent over the previous close. 

QatarEnergy confirmed that several of its liquefied natural gas (LNG) facilities suffered missile attacks in the early hours of Thursday, causing sizable fires and extensive further damage.

Meanwhile, the Wednesday attack on Ras Laffan resulted in extensive damage to the Pearl gas-to-liquids facility.

Emergency response teams were deployed immediately to contain the damage with no reported casualties, the company said.

Production there has been suspended since a previous Iranian drone strike on March 2.  

In response to what it called the Islamic Republic’s “blatant aggression”, Qatar expelled Tehran’s military and security attachés from Doha. 

Andreas Krieg, senior lecturer at the School of Security Studies at King’s College London, noted on social media platform X that companies from nearly a dozen countries, including the US, the UK, France, Japan, South Korea and China, are invested in the Ras Laffan “mega industrial site”, making it a vital part of the “global commons”. 

Ben Cahill, a non-resident fellow at the Arab Gulf States Institute in Washington, said on X that “more red lines [are] being crossed”.

“The market toll is rising every day: soaring jet fuel prices in Asia, nationwide diesel prices above $5/gal in the US, fuel rationing in multiple countries,” he wrote. “Still, things are moving in the wrong direction, and fast.”

Further reading:

• Hormuz supply squeeze lifts jet fuel prices to 10‑year high
• Rising air fares are ‘oil‑related, not opportunism’
• Opinion: Oil seeps from the strait but returning full flow is not easy

As a result of damage from the Israeli attack on its South Pars field, Iran halted gas flows into Iraq, “causing about 3,100 megawatts to go out of service”, the National newspaper quoted an Iraqi electricity ministry spokesperson as saying.

Iran also conducted its most aggressive attacks to date on Saudi Arabia on Wednesday, hitting the capital Riyadh, where debris from an intercepted missile injured four Asian nationals in a residential area, Saudi authorities said. 

Markets in the US stumbled, with the Dow Jones stock index falling more than 1.6 percent to a new low for the year. The S&P was down nearly 1.4 percent and the Nasdaq slid nearly 1.5 percent. 

Gold futures for April were down almost 3.7 percent at $4,823.90 per ounce after the US Federal Reserve kept interest rates unchanged amid increasing global geopolitical uncertainty. 

Qatar’s benchmark fell 1 percent and Kuwait was down 0.5 percent on Wednesday, while markets in the UAE, Saudi Arabia, Oman and Bahrain rose.