Prices for oil and gas are skyrocketing on international markets after a major escalation of the conflict between Israel and Iran, which has directly hit the strategic infrastructure of Gulf states.
European gas prices have surged abruptly, and oil is approaching new highs, amid fears of major disruptions to global supply.
Markets are reacting following attacks on key facilities in Iran, Qatar, Saudi Arabia, and the United Arab Emirates.
European gas prices jump by over 25%
The European gas benchmark (TTF) has surged, surpassing 70 euros/MWh at the opening, before stabilizing below 67 euros/MWh, marking an increase of around 25% in a single day.
Compared to pre-conflict levels when gas was trading around 32 euros/MWh, prices have doubled in just a few weeks.
The Guardian notes that other markets have reacted similarly: in the UK, prices have doubled since February and continue to rise, risking higher bills for the population.
Oil surges rapidly. Brent surpasses $115 per barrel
The energy shock is also reflected in the oil market. The Brent crude oil price (considered in Europe) has reached 115–116 dollars per barrel, a significant increase compared to the period before the conflict.
According to The Guardian, oil prices have risen by about 60% since the start of the war on February 28. The latest attacks alone added another 5% in a single day.
Analysts warn that the scenario of a $150 barrel is back on the table, given the increasing risks to the energy infrastructure in the region.
Direct hits on the energy infrastructure in the Gulf
The military escalation targeted some of the most important energy assets in the world.
- Qatar: Iranian missiles hit Ras Laffan, the main gas hub, causing "significant damage."
- Kuwait: A drone struck an operational unit at the Mina Al-Ahmadi refinery, about 50 km south of Kuwait City, causing a fire; no casualties were reported. A second drone targeted the Mina Abdullah refinery, also causing a fire.
- United Arab Emirates: Incidents reported at the Habshan gas facility and the Bab oil field after intercepted rocket debris fell in the area.
- Saudi Arabia: Two refineries in the capital Riyadh were attacked, prompting the Saudi government to warn that it reserves the right to take military action against Iran.
Global gas market affected in the long term
Consultancy firm Wood Mackenzie warns that the attacks have fundamentally altered the global gas market outlook.
Initial estimates of a two-month disruption have already been surpassed, with each additional month of interruption reducing annual global LNG availability by about 1.5%.
Europe is among the most exposed regions, as it has increasingly relied on LNG imports from Qatar after reducing dependence on Russia.
Trump threatens Iran with total destruction of the South Pars field
US President Donald Trump issued a stern warning after the attacks, claiming that Washington was unaware of the Israeli strike on the South Pars gas field.
"The United States knew nothing about this particular attack (...) Iran attacked the Qatar LNG facility unjustifiably," he stated.
However, Trump warned that if Iran continues its attacks on Qatar, the US could intervene directly. "The United States (...) will massively blow up the entire South Pars gas field with a force and power Iran has not seen before," Trump said.
Nevertheless, the South Pars field is jointly owned by Iran and Qatar, so a major strike would impact both sides of the Gulf.
Stock markets decline, inflation could return strongly
The rapid rise in energy prices has also impacted financial markets. Amid fears of a new global economic shock, significant declines have been recorded on stock exchanges in Asia and Europe.
"Fears of a prolonged energy shock have re-emerged (...) the chain effects of higher energy prices will have toxic consequences globally," warns Susannah Streeter.
Economists caution that the rise in energy costs could lead to a new wave of inflation and a resumption of interest rate hikes.
Major risks for maritime transport and global trade
The escalation of the conflict poses risks not only for energy production but also for global transport.
According to The Guardian, experts warn that the entire energy and logistical infrastructure in the Persian Gulf – including terminals, ports, and maritime routes – is now vulnerable.
Even vessels in waiting are no longer considered safe, and some states are negotiating directly with Iran to ensure safe passage through the Strait of Hormuz.