Gas prices soared and oil rose sharply on Monday as an escalation in the US-Israel conflict with Iran caused major disruption to production and supplies. QatarEnergy, the state-owned energy company, said it had halted production of liquefied natural gas (LNG) after attacks on its facilities in Ras Laffan and Mesaieed.
The Dutch day-ahead gas contract, the European benchmark, jumped 41% to €45 per megawatt hour, while the UK day-ahead contract rose 40% to 110p a therm. The shutdown at the world's biggest LNG export facility could result in the loss of almost 20% of global LNG supply, according to analysts.
Brent crude oil rose by as much as 13% in early trading to $82 a barrel, a 14-month high, as the effective closure of the Strait of Hormuz intensified supply concerns. Oil later fell back slightly but remained up nearly 6% at $77 a barrel. The strait is a vital artery for global trade, with about a fifth of oil supplies and seaborne gas tankers passing through it.
Stock markets fell across Europe, with London's FTSE 100 down 1.2%. Airlines IAG and easyJet were among the worst performers, falling 6% and 4% respectively, as thousands of flights were cancelled. However, oil companies BP and Shell rose about 3%, and defence contractor BAE Systems jumped 5%.
Gold, a safe-haven asset, rose 2.5% to $5,408 an ounce. The International Maritime Organization urged ships to avoid the Strait of Hormuz, and marine tracking sites showed tankers piling up on either side of the strait.
