GoKawiilGas prices jumped to four-year highs and oil prices rose again after an escalation of attacks by Israel and Iran on gasfields heightened fears of prolonged disruption to international energy supplies.
On Thursday, QatarEnergy told Reuters Iran had damaged facilities that produced 17% of the state-owned company’s liquefied natural gas (LNG) export capacity and that it would take three to five years to repair them.
Brent crude, the global oil benchmark, rose by 8% to $116 a barrel. Crude prices have soared by 60% since the US-Israeli war on Iran started on 28 February.
European gas prices jumped, with the Dutch wholesale gas price up 24% at €68 a megawatt hour, the highest since the end of December 2022. They have more than doubled since before the war.
UK gas prices have also more than doubled since late February, and are likely to drive up household bills. The month-ahead UK wholesale gas price rose by 23% on Thursday morning to 172p a therm, its highest level since August 2022. They still remain well below the peak of 800p a therm that was momentarily hit in March 2022.
Traders are responding to the escalation in the Middle East, where Tehran stepped up its attacks on energy facilities, causing significant damage to Ras Laffan – the world’s largest LNG facility in Qatar – in response to Israel’s attack on Iran’s South Pars gasfield.
The escalation of the war and its effect on oil and gas prices triggered a sharp sell-off across stock markets. Japan’s Nikkei tumbled 3.4%, South Korea’s Kospi fell 2.7% and Hong Kong’s Hang Seng was down 2%. European markets followed Asia. The UK’s FTSE 100 was down nearly 3% by early afternoon, while Germany’s Dax and France’s CAC were 2.3% and 2.2% lower respectively. Wall Street also opened lower.
Donald Trump has threatened to “massively blow up” South Pars completely if Iran attacks Qatar again. Israel’s decision to target the Iranian gasfield was a significant escalation of the war.
Ras Laffan in Qatar suffered “extensive damage” after strikes by Iran, QatarEnergy said.
The energy consultancy Wood Mackenzie said the attacks on Qatar’s LNG hub had fundamentally altered the global gas market outlook, as initial expectations of a two-month disruption at the site were now likely to be exceeded. Each additional month of disruption removes about 1.5% from annual global LNG availability.
... continue reading