The move caused European gas prices to jump by 54% on March 2, reaching a 1-year high and raising concerns about a new energy shock.
State-owned QatarEnergy Group confirmed that it has stopped LNG production at the Ras Laffan complex - the facility accounting for about 1/5 of global liquefied natural gas (LNG) supplies. This is considered an unprecedented step, directly threatening energy security and causing financial markets to falter.
European standard gas contracts increased the most since the 2022 crisis, when Russia launched a military campaign in Ukraine. In the context that LNG tankers from the Middle East almost stopped moving through the Strait of Hormuz from the weekend, global supply became even more strained.
Mr. Simone Tagliapietra, an expert at the Bruegel Research Institute, commented: "The threat to supply security is present right now. The severity depends on the interruption time, but clearly we have stepped into a completely new scenario.
Although most of Middle Eastern LNG is sold to Asia, any disruption will increase competition for alternative supplies, thereby pushing global gas prices to escalate.
In Europe, stockpiles are at an unusually low level. The region needs to import large volumes of LNG in the summer to fill stockpiles before winter. Although no direct intra-bloc disruptions have been recorded, the standard futures contract price has reached its highest level in 1 year.
According to well-informed sources, QatarEnergy has declared "force majeure", a clause allowing not to fulfill delivery obligations under contract due to uncontrolled events without being penalized.
The biggest question for traders is how long the crisis will last. US President Donald Trump said the air strike campaign against Iran could last for weeks. Meanwhile, the United Arab Emirates (UAE) and Qatar are said to be lobbying behind the scenes to persuade Washington to shorten the campaign time.
Goldman Sachs warned that if transportation through the Strait of Hormuz is suspended for 1 month, European gas prices could more than double. Even if the US increases LNG production, this additional source is unlikely to compensate for the short-term shortage from Qatar.
Qatar's Golden Pass expansion project in the US is expected to export the first shipment in the next few weeks, but will not reach maximum capacity until next year.
The situation became even tighter when Israel temporarily closed some gas fields, including Leviathan - the country's largest field - forcing Egypt to seek to buy more LNG on the spot market.
BloombergNEF also said that if the conflict prolongs, Turkey may increase its LNG demand because it imports gas pipelines from Iran.
Conflict continues to spread with explosions recorded in Israel, Saudi Arabia, Qatar and the UAE. The UAE said it intercepted Iranian missiles in retaliation.
Closing the March 2 session, the Netherlands' most recent monthly futures contract - the European gas benchmark - increased by 39% to 44.51 euros per megawatt-hour, the highest level since March 2025.
