Iran Conflict Torches Energy Markets: Oil Above $90, Gas at Three-Year High

Two separate but connected energy crises are burning simultaneously as the Iran conflict torches both the oil and natural gas markets. Oil has surged past $90 a barrel — more than 25% in a single week — while European natural gas prices have climbed to their highest levels in three years following drone-strike damage to Qatar’s LNG export infrastructure. The twin fire of oil and gas price surges represents the most severe energy market stress since the early Covid-19 pandemic.
The oil fire was lit by the conflict’s disruption of tanker traffic through the Strait of Hormuz, which has been effectively closed to normal commercial traffic since hostilities began. Nine vessels have been attacked, and Iran’s Revolutionary Guard continues to threaten further strikes. Oil unable to be shipped has accumulated in Gulf storage facilities, which are now filling rapidly — Kuwait has already cut production and Saudi Arabia and UAE face the same crunch within 20 days.
The gas fire was lit by a different but related cause: an Iranian drone strike on a key Qatari LNG terminal that has knocked out a significant portion of the country’s export capacity. Qatar supplies roughly 20% of global LNG, and its difficulties have set off a fierce competition between European and Asian buyers for available supplies. European gas prices have hit three-year highs, and the competition between regions is showing no sign of easing.
Qatar’s energy minister has warned that the conflict’s continuation could escalate both fires dramatically: all Gulf exporters halting production and oil reaching $150 a barrel, while LNG disruption could persist for weeks or months even after a ceasefire. The minister’s warnings carry the weight of direct personal knowledge — he is living through the infrastructure damage his country has already suffered.
Financial markets have responded to the twin energy crisis with widespread losses. Stocks have fallen across Asia, Europe, and the UK. Bond yields have surged, rate cut expectations have collapsed, and airlines have warned of massive profit losses. The dual oil-and-gas shock has created a more severe inflationary threat than either alone would have done, and central banks that were preparing to ease policy are now facing the prospect of having to tighten it instead.