The threat of a new natural gas crisis sent prices soaring by almost 50 per cent on Monday after Qatar was forced to halt production following attacks from Iran. Concerns over the escalating situation also prompted a global sell off on the markets.
The unprecedented move by QatarEnergy, the world’s largest liquid natural gas (LNG) company, alarmed traders in Europe and Asia and poses the first concrete threat to the global economy from the widening conflict in the Middle East.
The shutdown, which followed Iran targeting Qatar’s facilities with drone strikes, means the loss of almost 20 per cent of global LNG supplies at a time when the market is still recovering from the Russia-inflicted energy crisis in 2022.
The European gas benchmark, TTF, surged nearly 50 per cent to €47.80 per MWh, the biggest daily move in more than four years. It was later trading at about €44.70 per MWh.
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Oil prices rose about 8 per cent to $78.30 (€67) a barrel because of a near-complete halt of shipments through the Strait of Hormuz. Asian gas prices also surged, while the rise in the United States was more limited owing to domestic production.
Shares plunged on the Irish stock market, leaving the Euronext Dublin in the red. The main index fell almost 2 per cent on the opening session of the week, led by declines in banking shares and heavyweight food and construction stocks. The blue-chip FTSE 100 closed down 1.2 per cent, European shares were also well down while the US markets were muted in morning trading.
Though European energy prices remain well below their peak in 2022, when they soared almost tenfold after Russian president Vladimir Putin shut off the majority of Russian supplies, the pace of the jump will nevertheless unnerve politicians and central bankers. Consumers and investors are still reeling from the inflationary shock that began four years ago, which led to the first prolonged rise in interest rates since the 2008 financial crisis.
“Global gas markets could face a crisis well beyond the scale of oil markets,” said Saul Kavonic, an analyst at MST Financial.
“Europe is facing unusually low stocks post winter, and much of the new US supply growth has yet to come online,” he added.
Analysts warned that a prolonged loss of natural gas supplies from the Middle East could reach 120 billion cubic metres a year, greater than the total that Europe lost when Russia shut off pipelines in the wake of its full-scale invasion of Ukraine. Israel has also shut down two major gasfields.
“The drop in Russia gas pipeline supplies in 2022 was around 80 billion cubic metres,” said Anne-Sophie Corbeau, at Columbia University’s Center on Global Energy Policy. “This is a bigger volume, but crucially it obviously depends on how long this lasts.”
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Qatar relies on hydrocarbon sales, primarily LNG, for about 60 per cent of its GDP. Shell, ExxonMobil, TotalEnergies and ConocoPhillips are all investors in Qatar’s LNG facilities.
“A production halt would endanger every region, as QatarEnergy provides critical energy to over 120 countries,” said one person close to Qatar’s decision, adding that there would be a “cascade of economic harm”.
On Monday, Saudi Arabia also shut its oil-refining facility of Ras Tanura following an Iranian attack.
Ali Shihabi, a Saudi commentator close to the royal court, warned it was a “huge escalation”. “Saudi Arabia, which wanted to stay out of the war, will have to decide how to respond,” Shihabi said.
In a sign of investors’ fears over the deepening conflict, the gold price rose and global stocks fell, with the S&P 500 and the tech-heavy Nasdaq both dropping 0.6 per cent in early trading on Wall Street. – Copyright The Financial Times Limited 2026
