Escalating Middle East Conflict Drives Up Global Gas Prices
Global natural gas prices are surging following a series of escalating attacks in the Middle East, raising concerns about potential economic repercussions. The conflict, which began with an Israeli strike on Iran’s South Pars gas field on Wednesday, has seen retaliatory strikes targeting energy infrastructure in Qatar and the United Arab Emirates, according to reports.
Brent crude was trading at just over $108 a barrel on Thursday evening, peaking earlier in the day at $119, as investors reacted to the instability. UK gas prices rose to 154.8p per therm, an increase of 11.3% from the previous day, and reached as high as 183p on Thursday. The situation underscores growing regional tensions and the vulnerability of global energy supplies.
On Friday, March 20, 2026, Israeli military forces launched strikes targeting infrastructure in Tehran, the capital of Iran, as Iranians marked the Persian Novel Year, Nowruz. Activists reported hearing explosions around the city. This action followed a pledge by Israel to refrain from further strikes on the key Iranian gas field, while Iran simultaneously intensified attacks on oil and natural gas facilities in the Gulf region.
The conflict is also impacting financial markets. The FTSE 100 closed down 2.4% on Thursday, with similar declines observed in Paris and Frankfurt. Share indexes in Japan and the US also experienced losses as investors grew increasingly worried about the potential for a prolonged conflict. Bond yields on both sides of the Atlantic fell amid fears of rising inflation, with the UK experiencing a particularly sharp increase in gilt yields.
Heavy explosions were reported in Dubai early Friday as air defenses intercepted incoming fire, coinciding with the observance of Eid al-Fitr, the end of Ramadan. Iran has threatened “zero restraint” in its response to the Israeli strikes, and has been carrying out retaliatory attacks on Israel, prompting millions to seek shelter. The development could influence future diplomatic talks and efforts to de-escalate the situation.
Defense Secretary Pete Hegseth stated that the U.S. Has struck more than 7,000 targets across Iran, with Joint Chiefs Chairman Dan Caine confirming that military operations are continuing deeper into Iranian territory. The Pentagon is reportedly seeking an additional $200 billion to fund the ongoing war, a figure Hegseth indicated could potentially increase, stating, “it takes money to kill bad guys.”
See live updates on the war in the Middle East and more on the impact of the strikes on Qatar’s gas hub. Further information can be found at The Hill.
