Gas prices in Europe and Asia surged sharply after Qatar’s state-owned energy giant, QatarEnergy, suspended liquefied natural gas (LNG) production following drone attacks that Qatar blamed on Iran. The escalation also prompted Saudi Arabia to temporarily shut down parts of its key oil infrastructure after a separate drone incident.
In a statement on Monday, QatarEnergy confirmed that it halted LNG production and related operations after military strikes targeted its facilities in Ras Laffan Industrial City and Mesaieed Industrial City.
“Due to military attacks on QatarEnergy’s operating facilities in Ras Laffan Industrial City and Mesaieed Industrial City in the State of Qatar, QatarEnergy has ceased production of liquefied natural gas (LNG) and associated products,” the company said.
Shortly after the announcement, benchmark gas prices spiked. Dutch and British wholesale gas prices jumped nearly 50 percent, while Asian LNG benchmark prices climbed about 39 percent.
Qatar’s Defence Ministry said two drones launched from Iran struck critical infrastructure. One drone hit a water tank at a power plant in Mesaieed, while the other targeted a QatarEnergy facility in Ras Laffan. Authorities reported no casualties and said they would assess the damage and release further details.
Meanwhile, Saudi Arabia’s Defence Ministry reported that it intercepted two drones attempting to strike the Ras Tanura Refinery, one of the world’s largest oil processing facilities located near Dammam on the country’s Gulf coast. The intercepted drones caused a small fire, resulting in limited damage but no injuries, officials said.
The Ras Tanura refinery, which can process up to 550,000 barrels of oil per day, plays a central role in Saudi Arabia’s energy sector and global oil supply chains.
The attacks unfolded amid mounting tensions in the region. Oil tankers have crowded both sides of the Strait of Hormuz, a critical shipping route that carries roughly one-fifth of the world’s seaborne oil and most of Qatar’s gas exports. Fears of prolonged disruption have driven energy prices sharply higher.
Global oil prices surged by as much as 13 percent during intraday trading, climbing above $82 per barrel — their highest level since January 2025. Prices had already risen about 25 percent earlier in the day before extending gains after QatarEnergy confirmed the production halt.
In Europe, the Dutch TTF natural gas contract — a key benchmark for LNG — rose more than 25 percent in morning trading. By 11:31 GMT, it had gained 7.44 euros to reach 39.40 euros per megawatt hour.
In Asia, the S&P Global Energy Japan Korea Marker (JKM), a widely used LNG benchmark, stood at $15.068 per million British thermal units, according to Platts data.
Iran has launched retaliatory strikes across the region after the United States and Israel carried out large-scale air attacks on Iranian targets. Iranian strikes have primarily targeted Israel and US military facilities in the Middle East.
Saudi Arabia’s Energy Ministry said it halted certain operations at Ras Tanura as a precaution and stressed that it did not expect disruptions to domestic petroleum supplies.
Over the weekend, Saudi officials vowed to take “all necessary measures” to defend the country after Iran targeted Riyadh and the eastern region with missile strikes.
The United States, Bahrain, Jordan, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates issued a joint statement condemning Iran’s attacks and reaffirming their right to self-defence.
Rob Geist Pinfold, a lecturer in defence studies at King’s College London, told Al Jazeera that Iran fully understood the strategic implications of targeting Gulf energy infrastructure, signaling a deliberate escalation in the conflict.