US/Israel-Iran War: Qatar halts LNG production as Gulf tensions disrupt energy facilities

Qatar on Monday halted production of liquefied natural gas (LNG) after drone attacks targeted key industrial facilities, marking a significant escalation in the ongoing conflict involving Iran, Israel and the United States.

The suspension affects operations at Ras Laffan Industrial City, home to Qatar’s main gas processing facilities and export terminals.

The country is one of the world’s largest LNG exporters, accounting for about 20 per cent of global supply, making any disruption particularly significant for international markets.

Energy sources said the shutdown was taken as a precautionary measure following reported Iranian drone strikes on installations within the industrial complex.

However, there was no immediate official statement detailing the extent of damage or confirming how long operations may remain suspended.

Reuters reports that state-owned QatarEnergy is expected to declare force majeure on some LNG shipments if the disruptions persist. Such a declaration would allow the company to suspend contractual obligations due to circumstances beyond its control.

The development comes amid a third consecutive day of cross-border strikes across the Gulf region, raising concerns about the vulnerability of critical energy infrastructure.

In Saudi Arabia, authorities confirmed that drones were intercepted near the Ras Tanura refinery, one of the kingdom’s largest oil processing facilities. According to Saudi officials, debris from the intercepted drones caused a limited fire, though there were no reported injuries. Some refining units were shut down as a precaution, but officials said domestic fuel supply remained unaffected.

Similarly, oil production in Iraq’s Kurdistan region was suspended by several operators, including international firms, as a safety measure. While no damage was immediately reported, output was halted pending further security assessments.

Offshore Israel, energy companies were instructed to temporarily shut down the Leviathan gas field, one of the country’s largest energy projects. Smaller offshore production facilities were also suspended as tensions intensified.

The attacks have already had immediate effects on global markets.

European benchmark gas prices rose sharply, while oil prices climbed above $82 per barrel during intraday trading. Analysts attributed the surge to fears of possible disruptions to shipments through the Strait of Hormuz, a strategic maritime route through which a significant portion of the world’s oil supply passes.

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Iran, a major oil producer and member of the Organisation of the Petroleum Exporting Countries (OPEC), produces more than three million barrels of crude oil per day. Consequently, any prolonged disruption involving Gulf producers could further tighten global supply and increase price volatility.

Although regional authorities have maintained that key facilities remain under control, the situation remains fluid as tensions continue across multiple fronts.

Energy analysts warn that further attacks on strategic infrastructure could deepen instability in global oil and gas markets in the days ahead.