Qatar Halts LNG Production Following Iranian Drone Attacks, Sending Gas Prices Soaring
QatarEnergy, the state-owned energy company, has halted production of liquefied natural gas (LNG) after attacks by Iranian drones on key operating facilities, triggering a significant surge in European and Asian gas prices. The move comes amid escalating tensions following retaliatory strikes by Iran against U.S. Allies in the Gulf region, sparked by the killing of Ayatollah Ali Khamenei.
The attacks targeted facilities at Ras Laffan Industrial City and Mesaieed Industrial City, Qatar’s Defense Ministry reported on Monday, March 2, 2026. Even as no casualties were reported, QatarEnergy announced it had ceased production of LNG and associated products as a result of the military actions. This decision highlights the vulnerability of critical energy infrastructure in the region.
Benchmark Dutch and British wholesale gas prices jumped almost 50 percent in the immediate aftermath of the announcement, while benchmark Asian LNG prices rose nearly 39 percent, according to reports. The disruption to LNG supplies is particularly concerning given that approximately 20% of global LNG exports originate in the Persian Gulf, primarily from Qatar, and are shipped through the Strait of Hormuz, as noted by energy consulting firm Kpler.
The situation is further complicated by a temporary closure of some units at Saudi Arabia’s Ras Tanura oil refinery following a drone attack and subsequent fire. These combined disruptions are fueling concerns about regional energy security and potential supply shortages.
QatarEnergy is one of the world’s largest providers of LNG. The company stated, “Due to military attacks on QatarEnergy’s operating facilities in Ras Laffan Industrial City and Mesaieed Industrial City in the State of Qatar, QatarEnergy has ceased production of liquefied natural gas (LNG) and associated products.”
The escalating conflict between Iran and its adversaries is creating significant volatility in global energy markets. Investors are closely monitoring the situation for further developments and potential impacts on oil and gas prices. The timing of these events is particularly sensitive, as the global economy continues to navigate inflationary pressures and geopolitical uncertainties.
