European natural gas prices surged Tuesday, rising as much as 45% after Qatar halted production at the world’s largest liquefied natural gas (LNG) plant following Iranian drone attacks, raising concerns over global supply security. Benchmark Dutch TTF futures reached around €62 per megawatt-hour in early afternoon trading, a level not seen since the 2022 energy crisis, according to market analysts.
QatarEnergy announced it ceased LNG production linked to the North Field reservoir after its facilities in Ras Laffan Industrial City and Mesaieed Industrial City were targeted. The export complex accounts for approximately one-fifth of global LNG supply, underscoring Qatar’s central role in global energy markets. The company has not yet disclosed the extent of the damage.
The disruption follows U.S. And Israeli strikes on Iran, escalating tensions across a region critical to global oil and gas exports. Saudi Arabia also preemptively shut down its Ras Tanura refinery, the kingdom’s largest, after drone strikes caused a fire, according to sources. The 550,000 barrel-per-day refinery is a key export terminal for Saudi crude oil.
Several other major producers along the Gulf coast have also reportedly shut down production as a precautionary measure, though specific details remain limited. Iranian Deputy Foreign Minister Ali Bagheri Kani stated Iran was not responsible for the bombing of Saudi oil fields, according to reports.
Analysts at Kpler estimate the two Qatari facilities impacted by the attacks held enough LNG supplies to continue exports for three to four days. A week-long production halt could remove 1.6 to 1.8 million tons of LNG from global markets, exacerbating supply concerns. Simone Tagliapietra, a senior fellow at Bruegel, described the situation as “an abrupt acceleration in the energy implications of the crisis,” noting a “threat to security of supply.”
The price increases reach despite relatively high LNG supply levels over the winter and decreasing gas demand as spring approaches, according to TS Lombard economist Davide Oneglia. However, Europe’s limited storage capacity and the overall tightness of the global LNG market depart the continent particularly vulnerable to supply disruptions.
In Iraqi Kurdistan, companies including DNO ASA, Gulf Keystone Petroleum, Dana Gas and HKN Energy have suspended output at their oil fields as a precaution, with no damage reported as of Tuesday afternoon.
