By Georgi Kantchev and Joe Wallace
Global energy markets now hinge on a volatile new variable: battle damage assessments.
Oil and natural-gas prices surged Thursday after a sweeping escalation in the Persian Gulf. Iranian strikes on critical energy infrastructure have traders racing to determine exactly what was hit, the extent of the damage and how long facilities will be offline.
These attacks present a new reality for energy markets, already suffocating under the paralysis of the Strait of Hormuz. Unlike stalled tankers, which can sail the moment the strait reopens, impaired infrastructure takes months to rebuild and forced shutdowns can permanently destroy capacity.
There may simply be less left to export when shipping lanes reopen, threatening longer supply disruptions and fueling global inflation.
"This is the new reality the market is waking up to," said Tamas Varga, analyst at London-based oil broker PVM.
On Thursday, global oil-price benchmark Brent jumped as much as 10%, briefly touching $119 a barrel, after refineries in Saudi Arabia and Kuwait suffered hits. Natural-gas prices in Europe surged around 20% after Iranian attacks damaged Qatar's Ras Laffan, the world's largest liquefied-natural-gas plant.
In the fog of war, precise data is scarce and the battlefield is shifting too fast for investors to pin down a reliable damage assessment. For oil-and-gas prices, that blind spot means elevated volatility and a soaring risk premium.
"If every evening you sit down with your pen and paper to calculate what was hit and what's offline, then by the time you wake up in the morning, that calculation will be outdated," Varga said. "It's a nightmare."
Hunting for reliable data, commodity traders are hiring security consultants with on-the-ground Gulf sources and leveraging their own tanker fleets to probe for port disruptions. Wartime delays have throttled the vital flow of satellite imagery, while widespread signal interference in the Middle East has left the cottage industry of tanker tracking partially in the dark.
The new front in the war erupted Wednesday when Israel struck South Pars, the crown jewel of Iran's energy sector, and Tehran retaliated with missile barrages against Gulf energy facilities.
President Trump said that if Iran decides to attack Qatar again, the U.S. "will massively blow up the entirety of the South Pars Gas Field." Iran's military later warned that targeting Iranian energy infrastructure was a "major mistake," saying that further attacks would lead to escalation and "far more severe attacks."
Qatar said Iranian attacks caused extensive damage at Ras Laffan, which usually produces as much as a fifth of global LNG supply. Now, the prospect of physical destruction could significantly exacerbate a crisis that began earlier this month when an initial Iranian drone attack forced the plant to halt operations.
Dominating a sandy stretch of Qatar's northern coast, Ras Laffan is a sprawling industrial fortress of pipes, flare stacks and loading berths built around the world's largest artificial harbor.
The hub represents billions of dollars in joint investments from QatarEnergy and international heavyweights like Exxon Mobil, TotalEnergies and Shell.
Chilling natural gas to minus 260 degrees Fahrenheit shrinks it into a liquid that can be stored and shipped by tanker to LNG terminals, where it is returned to a gas and used to power factories and heat homes. The use of LNG, along with natural gas delivered via pipelines, has boomed in recent years, replacing coal and nuclear to generate electricity in many countries.
A key data point traders were trying to work out was whether Ras Laffan had gone into "cold shutdown" -- meaning refrigeration is still ongoing -- or "warm," which would take much longer to recover from.
The fallout isn't limited to the trading floor. Industries like aluminum, used extensively in transportation and construction, as well as helium, which is key for semiconductors, have been stung by the natural-gas shortages.
Major Asian economies -- including Japan, South Korea, India and China -- rely heavily on long-term contracts with Qatar for power generation and industrial output. Europe, emerging from a cold winter that has drained its storage inventories, has also been buying Qatari LNG alongside larger volumes of U.S. LNG in recent years to replace Russian gas.
The sudden loss of this massive supply node has already forced European and Asian buyers into a bidding war over the world's remaining uncontracted LNG cargoes, leading to a jump in prices.
"Repairs will be lengthy, so this will mean reduced LNG supply globally for many months," said Henning Gloystein, managing director for energy at consulting firm Eurasia Group. "You also can't really start repairing this sort of infrastructure unless you're confident you won't be attacked again."
A long-term disruption would stall production expansions in Qatar, forcing the global market into a structural reckoning. Economies both in the region and around the world had been counting on increased production of gas in the region to fuel the boom in data-center construction and electrification of vehicles.
"It would be a gamechanger for the global LNG market," said Natasha Fielding, head of gas pricing in Europe at Argus.
Beyond Ras Laffan, the most significant Iranian strike targeted the Samref refinery in Yanbu on Saudi Arabia's Red Sea coast.
The port of Yanbu has emerged as a vital safety valve for Saudi crude, allowing Riyadh to bypass the paralyzed Strait of Hormuz by piping oil via its East-West pipeline. The strike sends a chilling new signal: Iran could be viewing this crucial diversion route -- both the pipeline and the port itself -- as a legitimate target.
"It's getting properly disruptive," said Greg Newman, CEO of London-based oil brokerage Onyx.
To navigate the chaos, Newman said a recent hire has paid off -- a researcher who has contacts in the shipping industry. He has been working his sources to chase down rumors of attacks, disrupted flows or reports about naval escorts in the Gulf.
"We thought it was going to die down," he said. "But it's just escalating and escalating and escalating."
Write to Georgi Kantchev at georgi.kantchev@wsj.com and Joe Wallace at joe.wallace@wsj.com
(END) Dow Jones Newswires
March 19, 2026 10:38 ET (14:38 GMT)
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