Qatar and Saudi Pause Energy Production, Global Prices Brace for Impact

Qatar has temporarily stopped its liquefied natural gas (LNG) production after Iranian drone strikes targeted Gulf countries, escalating the regional energy crisis and sending shockwaves through global markets.

Qatar LNG, a Global Power Player, Goes Offline

The shutdown affects QatarEnergy’s Ras Laffan complex, a facility responsible for around 20% of global LNG supply. The move disrupts exports to both Asia and Europe, and the company is reportedly considering declaring force majeure on affected shipments.

Drones also hit Mesaieed industrial zone in southern Qatar, home to petrochemical and manufacturing facilities, far from the gas fields but crucial to industrial operations.

Energy Prices Surge

The market reacted immediately:

• European gas prices surged nearly 46% at the Dutch TTF hub.

• Oil prices jumped over 13%, hitting $82 a barrel, the highest since January 2025.

Shipping in the Strait of Hormuz — which handles about a fifth of the world’s oil supply — has slowed dramatically, adding pressure to global energy flows.

Saudi Arabia Shuts Refinery as Precaution

In Saudi Arabia, Aramco’s 550,000 bpd Ras Tanura refinery temporarily halted operations after drones were intercepted. A small fire broke out from debris, but there were no injuries and local petroleum supply was unaffected, according to the Saudi Ministry of Defence.

This facility is not only a refinery but also a key export terminal, highlighting the strategic impact of these attacks.

Analysts Warn of Escalation

Experts see these attacks as a serious escalation. Torbjorn Soltvedt of Verisk Maplecroft noted that Gulf energy infrastructure is now squarely in Iran’s sights, potentially drawing Saudi Arabia and neighboring states closer to military action alongside the U.S. and Israel.

This follows previous incidents, including the 2019 drone strikes on Abqaiq and Khurais that temporarily cut half of Saudi crude output, and attacks on Ras Tanura by Iran-aligned Houthis in 2021.

The unfolding crisis underscores the vulnerability of Gulf energy hubs and the tight link between regional tensions and global energy markets.