Iran Strikes Disrupt Global Energy Markets, Raising Prices and Supply Concerns

Recent drone and missile strikes targeting energy infrastructure across the Middle East, widely attributed to Iran, are causing significant disruption to global energy markets and driving up prices. The attacks, impacting facilities in Bahrain, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates, represent an unprecedented escalation of regional conflict with potentially far-reaching consequences.

Escalating Attacks and Regional Impact

In less than a week, strikes have hit energy infrastructure in at least six countries, including Qatar’s Ras Laffan liquified natural gas (LNG) export facility – the world’s largest. Saudi Arabia’s Ras Tanura oil refinery has also been targeted multiple times, with the most recent attack occurring on March 2, 2026 . Whereas Iran accuses Israel of hitting a refinery in Saudi Arabia, the majority of countries point to Iran as the source of the strikes .

“I do not think there’s precedent for this kind of regionwide conflict with facilities coming under attack from all kinds of methods, over a wide era, and all types of facilities at basically the same time,” says Robin Mills, chief executive of Qamar Energy, an energy advisory company based in Dubai.

LNG Supply Disrupted

Approximately one-fifth of the world’s LNG originates from Qatar. LNG, natural gas cooled to approximately -260 Fahrenheit for transport via ship, is crucial for electricity generation, heating, and the production of petrochemicals. Following the strikes on Ras Laffan, QatarEnergy shut down production and declared force majeure, a legal term excusing it from contractual obligations. This is expected to disrupt LNG supplies to Asia and Europe for weeks, if not longer .

Israel has also curtailed some offshore natural gas production, further tightening global supplies. While the world currently has an oversupply of oil, the same is not true for natural gas and LNG, particularly as Europe’s natural gas storage levels are low at the end of winter .

Price Increases and Market Response

“This may be the first time in history that the shutdown of LNG from the Gulf will have a more pervasive and negative impact than a cessation of crude oil exports,” says Gerry Kepes, president of Competitive Energy Strategies, an energy consultancy in Washington D.C.

Simon Flowers, chairman and chief analyst at research firm Wood Mackenzie, noted that “The consequences of the war for gas and LNG are uncertain but could rival those that followed Russia’s invasion of Ukraine in 2022.”

Natural gas prices in Europe have risen by more than 60% since the conflict began, while Asian natural gas prices have increased by over 40%.

Limited Capacity for Replacement

LNG producers in Australia and Malaysia could potentially reroute some cargoes to Asia and Europe. The United States, now the world’s largest LNG exporter, has latest facilities coming online in the Gulf Coast. However, there is limited spare capacity to quickly offset the lost supplies from the Persian Gulf. “Countries and companies don’t really carry LNG spare capacity,” Mills explains. “They run the plants as close to full out as they can almost all the time.”

Stock prices for several LNG producers have already increased, with Australian companies Woodside Energy Group and Santos Energy rising more than 9% and 10% respectively, and U.S. Companies Cheniere and Venture Global seeing increases of over 8% and 27% in the last week.