Qatar halts LNG output as Iran conflict hits Gulf energy infrastructure
The conflict between the US, Israel and Iran has moved beyond direct military exchanges and into the energy infrastructure that underpins global supply chains.
The escalation follows US and Israeli air strikes inside Iran that killed Ayatollah Ali Khamenei and according to Iranian authorities and the Iranian Red Crescent Society, more than 550 people across the country.
Iranian officials say about 180 of those killed were schoolgirls, in a strike on a girls’ school in Minab. Tehran’s response has extended beyond missile exchanges to include attacks on regional energy assets.
The consequences are being felt in global markets.
QatarEnergy said it had suspended production of liquefied natural gas at its Ras Laffan and Mesaieed facilities after Iranian drone strikes damaged energy infrastructure. The state-owned company said it halted LNG output and associated products as a precaution while authorities assessed the damage.
Qatar is one of the world’s largest LNG exporters. A suspension of output removes roughly 20% of global LNG trade by volume from immediate supply. European gas futures rose sharply after the announcement as traders reacted to the risk of reduced cargo availability.
Oil markets moved in parallel. Brent crude climbed as traders assessed the risk of broader Gulf disruption. Roughly a fifth of global seaborne oil passes through the Strait of Hormuz.
Even without confirmed long-term damage to infrastructure, markets are pricing in uncertainty over exports from one of the world’s most critical energy corridors.
The disruption comes amid severe constraints on shipping through the Strait of Hormuz, a key maritime route for oil and gas exports from the Gulf. Military activity has slowed tanker movements and increased insurance costs for vessels operating in the region.
In Saudi Arabia, authorities said drones had attempted to target the Ras Tanura oil refinery, one of the world’s largest processing facilities that has a capacity of about 550 000 barrels a day. A small fire broke out after the drones were intercepted.
Some operations were halted as a precaution, although officials said domestic supply would not be affected.
Markets are reacting not only to confirmed supply interruptions but to duration risk. Even temporary shutdowns can alter trading routes, contract pricing and procurement strategies. Prolonged disruption can carry broader inflationary consequences for fuel, electricity and industrial inputs in import-dependent economies.
In South Africa, the department of mineral and petroleum resources announced on Monday that the price of petrol would increase by 20 cents a litre from Wednesday, diesel by as much as 65 cents, illuminating paraffin by 44 cents and liquefied petroleum gas by 26 cents more a kilogramme.
It cited higher crude oil prices as one of the main reasons for the impeding upward adjustments, adding: “The main contributing factors are the higher shipping rates as well as the geopolitical uncertainty caused by the tension between the US and Iran, which could result in disruption of crude oil supply in the Strait of Hormuz.”
The United Nations’ nuclear watchdog said there was no indication that Iran’s nuclear facilities had been damaged. International Atomic Energy Agency director-general Rafael Grossi said inspections had found no evidence of hits on installations, including the Bushehr power plant or other fuel-cycle facilities.
Grossi reiterated that nuclear sites must not be targeted in conflict, warning of severe radiological consequences if they were struck.
Energy infrastructure has been directly hit. Nuclear facilities, for now, remain intact. The contrast underscores how far the conflict has widened beyond conventional military targets.