US attack on Iran pushes gas markets higher
European natural gas prices jumped after QatarEnergy suspended LNG production following Iranian retaliation targeting key energy infrastructure in the country.
Following the US attack on Iran, European gas prices recorded their largest daily increase since the 2022 energy crisis.
The TTF index, Europe’s main virtual gas trading hub based in Amsterdam, rose by more than 50%, surpassing €47 per MWh. The surge reflects market concerns over global supply security, given that Qatar accounts for roughly one fifth of global LNG supply. In Europe, diesel prices rose by 4.3%, reaching $925 per metric ton.
QatarEnergy halted operations at Ras Laffan and Mesaieed after reported Iranian drone strikes. The extent of the damage and the risk of further escalation prompted the company to suspend scheduled shipments.
Oil and commodity markets react
The escalation of tensions in the Middle East has unsettled commodity markets. In addition to gas, oil prices also climbed significantly, with Brent crude returning above $80 per barrel.
Russia’s reaction and market outlook
Analysts expect energy prices to remain under upward pressure in the near term. Bernstein indicated that, should tensions persist or escalate further, crude oil could trade in a range between $120 and $150 per barrel. Other market observers, however, argue that the oil market has shown structural resilience, pointing out that price reactions so far have been measured compared to past geopolitical shocks.
Higher crude prices would inevitably favour major exporting countries. Russia, in particular, could see increased revenues as global benchmarks rise. While Moscow continues to offer discounted barrels to China and India, a stronger overall price environment would still support its fiscal inflows.
Global LNG scramble
In London’s marine insurance market, war-risk premiums climbed sharply as soon as the military escalation unfolded. By the weekend, several insurers had reportedly suspended coverage linked to conflict-related risks.
Reuters reported that logistical bottlenecks combined with the production suspension in Qatar led India to introduce gas rationing measures. Meanwhile, several Asian economies moved swiftly to secure replacement cargoes through the spot market or activated contingency supply mechanisms.
Europe faces heightened exposure
Europe remains one of the regions most vulnerable to disruptions in LNG flows. Since the outbreak of the war in Ukraine, European governments have significantly increased their dependence on maritime LNG imports to offset reduced Russian pipeline deliveries. With summer demand expected to rise, any prolonged interruption of Qatari exports could intensify global competition for available shipments.
“If traders start factoring in a sustained disruption of Qatari supply, TTF prices could climb into the €80 to €100 per MWh range,” ING’s Warren Patterson told Bloomberg.
Although Asia is the primary destination for Qatari LNG, tighter global availability tends to lift prices across all markets. European importers may therefore be forced to pay higher premiums to attract cargoes from alternative suppliers such as the United States or Africa. Analysts caution that, as seen in 2022 after Russia’s invasion of Ukraine, sustained price pressure could translate into renewed inflationary strain across European economies.
The European Commission said it is monitoring both supply conditions and price dynamics closely. It also confirmed the creation of an Energy Task Force with Member States, working alongside the International Energy Agency, with its first meeting scheduled this week.