Global oil and natural gas prices soared on Thursday after Iran attacked a key natural gas facility in Qatar that can supply one-fifth of the worlds gas as well as two oil refineries in Kuwait.
The attacks added to fears the energy crisis triggered by the closure of the Strait of Hormuz to tanker traffic may be longer and more extensive than feared, with lasting damage to oil and gas production.
Brent crude, the international benchmark, rose to $116.38 per barrel, up from under $73 per barrel on the eve of the war.
The European TTF benchmark for natural gas prices traded 24% higher on Thursday.
The Iranian attack hit the Ras Laffan terminal for shipping out liquefied natural gas in Qatar.
Qatar normally supplies some 20% of the world’s consumption of LNG, which can be carried by ship.
The facility shut down after a drone attack.
The closure of the Strait of Hormuz to most tanker traffic also left the gas with nowhere to go.
If the disruptions from Iran’s attacks on its Gulf Arab neighbours’ energy infrastructure keep oil and gas prices high for long, they could create a debilitating wave of inflation for the global economy.
US benchmark crude oil gained 1.1% to $96.45 a barrel early Thursday, while the Henry Hub future contract, the benchmark for US natural gas, gained 5.1%.
As oil and gas prices spiked, world shares retreated and US futures edged 0.2% lower.
Germany’s DAX lost 2.1% to 23,015.40 and the CAC 40 in Paris fell 1.5% to 7,848.88. Britain’s FTSE 100 shed 1.7% to 10,134.02.
In Asian share trading, Tokyo’s Nikkei 225 fell 3.4% to 53,372.53 as the Bank of Japan opted to keep its benchmark interest rate on hold at 0.75%, citing the war with Iran as one factor.
