Global Gas Prices Surge Nearly 50% Following Disruption to Qatar Energy Production Due to Middle East Attacks

A brutal and deadly attack by Israel and the United States against Iran on Saturday, 28 February, shocked the world.

Global wholesale gas prices surged sharply following the production disruption at Qatar Energy, a major liquefied natural gas (LNG) exporter. The Dutch and British benchmark gas prices jumped nearly 50 per cent in response to the announcement.

“The disruption to LNG flows will reignite competition between Asia and Europe for available cargoes,” said Massimo Di Odoardo, vice president of gas and LNG research at Wood Mackenzie.

The next-month contract on the Dutch TTF hub, considered the benchmark price for Europe, rose 14.56 euro to 46.52 euro per megawatt-hour (MWh), or approximately $15.92 per million British thermal units (mmBtu), at 1255 GMT, according to ICE data. Prices had already climbed approximately 25 per cent earlier in the day but continued rising following Qatar Energy’s production halt.

Asia’s LNG benchmark price surged nearly 39 per cent on Monday, 2 March morning, with the S&P Global Energy Japan-Korea-Marker (JKM), widely used as the LNG Asia benchmark, reaching $15.068 per million British thermal units, according to Platts data.

“If the LNG/gas market begins to factor in an extended period of LNG supply shortage from Qatar, the TTF has the potential to surge to 80–100 euro/MWh ($28–35/mmBtu),” said Warren Patterson, head of commodity strategy at ING. The April contract on the British market rose 40.83 pence to 119.40 pence per therm, according to ICE data.

The slump in manufacturing sector performance continues to be accompanied by elevated inflation levels, which has prompted manufacturing companies to raise their production costs.