Oil and gas prices jumped Monday as escalating Iranian strikes across the Middle East snarled shipping lanes, hit energy infrastructure and stoked fresh inflation fears in global markets.
European natural gas futures spiked as much as 50% intraday before closing 39% higher after QatarEnergy halted liquefied natural gas production following drone attacks on facilities in Ras Laffan Industrial City, according to the country’s defense ministry. Brent crude briefly touched $82 a barrel after at least three ships were attacked near the Strait of Hormuz over the weekend, a chokepoint that handles about 20% of the world’s oil and gas flows.
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Iran warned commercial vessels against transiting the strait in the south of the country. The UK Maritime Trade Operations center reported two vessels struck and a third nearly hit by an “unknown projectile,” prompting a de facto pause in traffic at the entrance to the waterway. Ship-tracking data showed at least 150 tankers anchoring in Gulf waters beyond Hormuz, with only a handful of Iranian and Chinese ships moving through.
Saudi Aramco temporarily shut its major Ras Tanura refinery after a drone hit the site, while Qatar’s defense ministry said a second drone targeted a water tank tied to a power plant in Mesaieed, south of Doha. Danish shipping group Maersk said it would pause sailings through the Bab el-Mandeb Strait and the Suez Canal and reroute vessels around the Cape of Good Hope, extending voyage times and costs.
Stock markets seesawed as investors weighed the prospect of higher-for-longer energy costs. In the United States, the Nasdaq and S&P 500 opened lower but recovered to end marginally higher. London’s FTSE 100 fell 1.2%, with the owner of British Airways among the steepest decliners amid airspace disruptions across the region. Banks including Barclays, Standard Chartered and HSBC slid on worries that pricier fuel could reaccelerate inflation and curb the scope for interest-rate cuts. Oil and defense shares led the FTSE’s risers. France’s CAC-40 closed down 2.2% and Germany’s DAX lost 2.6%.
Energy analysts said the scale and duration of the disruption will determine whether crude breaks decisively higher. Some warn prices could top $100 a barrel if a prolonged conflict further constricts flows through Hormuz. Others noted that, so far, most production and export infrastructure has not been a primary target and that a resumption of safe passage through the strait could cool prices quickly.
The price shock is already filtering through to inflation calculus. Edmund King, president of the AA, said turmoil and bombing in the Middle East are likely to disrupt global oil distribution and drive up pump prices. Subitha Subramaniam, chief economist at Sarasin & Partners, warned that sustained high oil could cascade into food, agriculture and industrial inputs, deepening price pressures. With UK inflation easing in recent months, she said the Bank of England may opt to hold its benchmark rate at 3.75% for now despite earlier signals of further cuts.
Opec+ signaled a modest buffer on Sunday, agreeing to increase output by 206,000 barrels a day to cushion price rises, though several experts doubt the move will meaningfully offset a shipping-led supply squeeze if the crisis worsens.
The Islamic Revolutionary Guard Corps said three UK- and US-linked tankers were hit by missiles and were burning; London and Washington have not commented. The UKMTO cited “multiple security incidents” across the Arabian Gulf and Gulf of Oman and advised vessels to transit with caution.
Market participants are watching two immediate markers: whether energy infrastructure remains off-limits to further strikes and, crucially, when commercial traffic can safely resume through Hormuz. A swift reopening would likely ease crude and gas prices; a protracted stoppage risks another broad inflation flare-up and a tough new test for central banks trying to land their economies softly.
By Ali Musa
Axadle Times international–Monitoring.
