Stock markets rattled and energy prices soar after strikes on Qatar gas hub
Why it matters: Escalating Middle East conflict threatens global energy supply, fueling inflation and making borrowing more expensive.
- Brent crude rose to over $108 a barrel, peaking at $119 earlier, while UK gas prices jumped 11.3% to 154.8p per therm, hitting nearly 183p.
- Global stock markets saw significant drops, with the FTSE 100 falling 2.4%, Japan's Nikkei down 3.4%, and European and US indexes also declining.
- Bond yields increased sharply across the Atlantic, with UK gilt yields seeing their biggest daily rise since 2022, signaling investor concern over inflation and government debt.
- QatarEnergy reported that repairs to the Ras Laffan facility will reduce LNG output by 12.8m tons for three to five years, impacting a country that produces a fifth of the world's LNG.
- Nick Butler, former head of strategy at BP, warned that the strike on Ras Laffan will "almost certainly cut off a level of supply of LNG to the world market," pushing up prices due to the difficulty of quick substitution.
Global stock markets plummeted and energy prices surged after Iranian strikes hit Qatar's main gas facility, Ras Laffan, causing extensive damage and raising fears of prolonged energy supply disruptions. This escalation, following an attack on Iran's South Pars gas field, has investors worried about inflation and the potential for higher mortgage rates, with the UK particularly vulnerable due to its reliance on imported natural gas.
