Natural gas prices soar 50% and Brent crude climbs 10% after QatarEnergy halts production amid Iran–US–Israel tensions and attacks near the Strait of Hormuz.
By Opinion Nigeria
Natural gas prices surged by nearly 50% on Monday after QatarEnergy, one of the world’s largest exporters, suspended production following what it described as “military attacks” on its facilities amid the escalating Middle East crisis triggered by US-Israeli strikes on Iran.
According to BBC, the spike in oil and gas prices comes as Iran continues to carry out strikes across the region in retaliation for ongoing attacks by the US and Israel.
Brent crude, the global oil benchmark, jumped 10% to trade above $82 per barrel on Monday. The rise followed weekend attacks on at least three ships near the Strait of Hormuz.
Iran warned vessels against navigating the key southern waterway, through which roughly 20% of global oil and gas supplies pass.
In London, the FTSE 100 fell by 1%, with the parent company of British Airways among the hardest hit as Middle East airspace disruptions weighed on airline stocks.
Major banks including Barclays, Standard Chartered and HSBC also recorded share price declines amid fears that prolonged energy price increases could drive inflation higher and reduce the likelihood of further interest rate cuts by central banks.
Elsewhere in Europe, markets posted sharper losses. France’s CAC 40 dropped 1.8%, while Germany’s DAX extended earlier losses to 2.1% in early afternoon trading.
Gold, considered a safe-haven asset during periods of uncertainty, rose 2% to $5,388 per ounce.
QatarEnergy confirmed it had halted liquefied natural gas (LNG) production after Qatar’s Ministry of Defence reported that a drone launched from Iran targeted a facility in Ras Laffan Industrial City. Another drone was said to have targeted a water tank at a power plant in Mesaieed, south of Doha.
In neighbouring Saudi Arabia, Saudi Aramco temporarily shut down its major oil refinery at Ras Tanura on the coast following a drone strike.
Shipping activity at the entrance to the Strait of Hormuz has nearly ground to a halt, with analysts cautioning that a prolonged conflict could drive energy prices even higher.
The UK Maritime Trade Operations said two vessels were hit, while an “unknown projectile” reportedly “exploded in very close proximity” to a third ship.
After the initial spike, Brent crude retreated to $79 per barrel, while US-traded oil remained up about 7.6% at $72.20.
“The market isn’t panicking,” Saul Kavonic, head of energy research at MST Marquee, told the BBC. “There is more clarity that so far, oil transport and production infrastructure hasn’t been a primary target by any side,” he added.
“The market will be watching for signs that traffic through the Strait of Hormuz returns, which would see oil prices subside again.”