Gas Prices Surge as QatarEnergy Halts LNG Production After Iran Attacks

Qatar’s state-owned energy giant has suspended liquefied natural gas (LNG) production following drone attacks attributed to Iran, triggering a sharp surge in European gas prices and heightening tensions across the Gulf region.

In a statement issued on Monday, the company confirmed the halt in operations, saying: “Due to military attacks on QatarEnergy’s operating facilities in Ras Laffan Industrial City and Mesaieed Industrial City in the State of Qatar, QatarEnergy has ceased production of liquefied natural gas (LNG) and associated products,” the world’s largest LNG producer said in a statement on Monday.

The announcement sent shockwaves through global energy markets, with natural gas prices in Europe rising by nearly 50 percent shortly afterward.

Earlier in the day, Qatar’s Defence Ministry reported that two drones launched from Iran had targeted facilities in the country. “One drone targeted a water tank belonging to a power plant in Mesaieed, and the other targeted an energy facility in Ras Laffan Industrial City, belonging to QatarEnergy, without reporting any human casualties,” the ministry said.

It added: “All damages and losses resulting from the attack will be assessed by the relevant authorities, and an official statement will be issued later.”

Meanwhile, Saudi Arabia confirmed that its Ras Tanura oil refinery was also targeted. According to the Saudi Ministry of Defence, two drones “attempted to attack” the refinery on Monday morning, and a “small” fire broke out after they were intercepted. Authorities stated that the facility sustained limited damage and reported no casualties.

The Ras Tanura refinery, located near the eastern city of Dammam, has a processing capacity of 550,000 barrels per day and is one of the largest oil facilities in the Middle East, forming a key pillar of Saudi Arabia’s energy infrastructure.

The attacks come amid mounting maritime congestion around the Strait of Hormuz, a critical chokepoint through which roughly one-fifth of the world’s seaborne oil and a significant portion of Qatari gas exports pass. Oil tankers have reportedly been accumulating on both sides of the strait as security concerns intensify.

Global oil prices have climbed sharply on fears of prolonged instability in the region, raising concerns about broader economic consequences.

The strikes are part of escalating regional hostilities after the United States and Israel launched extensive air raids on Iran. In response, Tehran has carried out retaliatory attacks, targeting Israel and US military installations across the Middle East.

In a statement carried by the Saudi Press Agency, the Saudi Ministry of Energy said certain refinery operations had been halted as a “precautionary measure” and emphasized that it did not anticipate “any impact on the supply of petroleum products to local markets”.

Saudi Arabia had previously pledged to “take all necessary measures to defend its security and protect its territory, citizens, and residents, including the option of responding to the aggression” following earlier strikes on Riyadh and the kingdom’s eastern region.

On Sunday, the United States, Bahrain, Jordan, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates issued a joint statement condemning the Iranian attacks and affirming their right to self-defence.

Rob Geist Pinfold, a lecturer in defence studies at King’s College London, told Al Jazeera that Iran “knows exactly what it’s doing” by targeting Gulf nations.

“These countries have less of an appetite for a fight because, at the end of the day, this is not their war. So, Iran is banking that they will want a ceasefire as soon as possible, that they will be pressuring the Trump administration. But we have no signs of that whatsoever so far,” he said.

Pinfold added that while Gulf states are presenting a united front publicly, underlying divisions remain.

“They’re trying to get the message across that they are one and that they are united and that they are resilient,” Pinfold said. “But under the surface, there are profound disagreements here about how to engage with Iran and whether to engage with Iran at all.”