Further sharp surge in gas and oil prices

Gas prices jumped by roughly 20% this morning following a major escalation in the Middle East conflict, with new strikes on key energy infrastructure raising fears of a broader energy crisis.

Israel initiated the latest round of attacks on energy facilities by hitting Iran’s South Pars gas field, a move widely criticised by other nations. In response, Tehran launched strikes on Qatar’s Ras Laffan Industrial City, the world’s largest LNG hub, driving energy prices sharply higher. Although production at the site had already been suspended after earlier incidents, QatarEnergy reported that the latest wave of missiles caused “sizeable fires and extensive further damage.”

The South Pars strike marks the first direct attack on Iran’s fossil fuel infrastructure since the US and Israel launched the war nearly three weeks ago. Iran’s retaliation has extended beyond Qatar, with missile strikes igniting a Saudi refinery and setting Kuwaiti oil installations ablaze. Officials in Abu Dhabi also confirmed the shutdown of operations at the Habshan gas plant and Bab field, describing Iran’s overnight attacks as a “serious escalation.” Missile alerts were triggered across several Gulf regions, and Israel issued warnings of further incoming Iranian fire. These developments highlight a deepening regional conflict, occurring just hours after Iran threatened to target oil and gas assets throughout the Gulf in response to Israel’s earlier strike on the South Pars field.

Gas prices have climbed to their highest level in four years, with the front‑month Apr‑26 contract briefly reaching 180p/th this morning before easing back to 165p/th. Current prices remain more than 19% above yesterday’s close, with the Summer‑26 contract trading above 160p/th and the Winter‑26 contract around 155p/th. This latest surge adds to the recent volatility driven by the broader Middle East conflict. Europe, which is heavily reliant on LNG imports after reducing Russian pipeline gas, is particularly sensitive to any disruptions in Gulf export capacity. With gas storage levels already low and refilling ahead of the coming winter critical, prices have spiked rapidly. Oil markets have also reacted, with front-month Brent crude rising by more than 6% to around $114/bbl following increased Iranian attacks on key energy infrastructure across the Persian Gulf, heightening fears of further supply disruptions.

Trump stated that he had no prior knowledge of Israel’s planned strike on the oil facility, a claim some diplomatic experts dispute, and added that Israel would refrain from further attacks on the South Pars Field unless Iran initiated further attacks. However, he warned Tehran that any additional attacks on Qatari assets would prompt the U.S. to “massively blow up the entirety of the South Pars Gas Field.” Meanwhile, the Strait of Hormuz, through which roughly 20% of the world’s oil supplies and seaborne gas tankers usually pass, remains largely closed. Trump’s attempts to assemble an international naval coalition to reopen the critical route have so far made little progress.

Escalating strikes on oil and gas facilities across the Persian Gulf are pushing the U.S.-Israeli conflict with Iran into an even more dangerous stage, increasing risks to global energy security. Analysts expect prolonged supply disruptions, as extensive damage to key infrastructure is likely to delay a return to normal operations even after the conflict subsides.

The situation is developing on a daily basis, but if you are concerned about your business energy prices and what these changes could mean, please reach out to our Trading and Risk team directly here.

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