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A recent missile assault on Qatar’s Ras Laffan Industrial City has triggered significant disruptions in the global gas market, leading to a sharp increase in prices. The attack, attributed to Iranian forces, targeted critical infrastructure within this key facility known for its substantial contribution to liquefied natural gas (LNG) production. As analysts warn of potential long-term repercussions, consumers worldwide may soon feel the effects.
Attack on Ras Laffan Industrial City
Ras Laffan is Qatar’s primary production hub for LNG, which is a vital energy source used for cooking, heating, and electricity generation across the globe. Responsible for approximately 20% of the world’s LNG supply, this industrial centre also houses a gas-to-liquids plant, LNG storage facilities, and an oil refinery. Situated 80 kilometres northeast of Doha, it is strategically positioned near the North Dome, the world’s largest gas field, which Qatar shares with Iran.
Recent hostilities have seen Ras Laffan’s operations significantly compromised. QatarEnergy confirmed that the facility experienced two missile strikes, one of which inflicted “extensive damage” on Shell’s Pearl gas-to-liquids facility, while the other resulted in “sizeable fires and extensive further damage” to various LNG facilities. Production has been halted since early March due to the ongoing conflict.
Impact on Gas Prices
In the wake of these attacks, gas prices have surged dramatically. Trading on Thursday morning indicated that UK gas prices spiked over 30% at one point, currently standing at approximately 170p per therm—an increase of around 22%. European gas markets mirrored this volatility, escalating by 20% on the same day. Matthieu Favas, commodities editor at The Economist, highlighted the magnitude of the price increase as “huge”, raising concerns that the recent violence marks an escalation in the ongoing conflict, with supply disruptions potentially lasting longer than initially anticipated.
Kristy Kramer, head of LNG strategy at Wood Mackenzie, remarked that the events at Ras Laffan “fundamentally reshape [the] global LNG outlook”. Market forecasts, which had previously suggested a brief disruption with a return to normal supply levels by mid-2026, now appear overly optimistic. Nick Butler, former head of strategy at BP, echoed these sentiments, warning that the global LNG supply could be significantly affected, leading to inevitable price hikes. He emphasised that the inability to quickly replace lost gas supplies could exacerbate the situation.
The UK’s Gas Supply Landscape
The United Kingdom primarily relies on Norway and the United States for its gas imports, with Norway providing about 75% and the US around 17% of the total. Notably, LNG from Qatar constitutes less than 2% of the UK’s imports. Nevertheless, gas prices have a considerable influence on electricity costs in the UK since gas is used as the “marginal source of power” by the energy regulator, Ofgem. Consequently, increases in gas prices directly impact wholesale electricity prices, affecting consumers across the nation.
Experts are urging the government to devise a robust energy security plan to manage the potential fallout from rising prices. Butler stressed that immediate action is necessary to protect consumers from the anticipated financial burden in the coming months as the market continues to adjust.
Why it Matters
The recent missile attacks on Ras Laffan not only threaten the stability of the global LNG supply but also jeopardise energy security for countries reliant on gas imports, including the UK. As prices continue to rise, consumers may face increased energy bills, prompting urgent discussions around government intervention and long-term strategies for energy resilience. The unfolding situation underscores the fragility of global energy markets, particularly in the face of geopolitical tensions.
