DOHA/NEW YORK — The Iran war entered a terrifying new phase on Wednesday and Thursday as strikes on critical energy infrastructure across the Persian Gulf threatened to plunge the global economy into its most severe energy crisis since the 1970s. Iranian missiles struck Qatar's Ras Laffan Industrial City twice in less than 12 hours, causing what Qatari officials described as 'extensive damage' to the world's largest liquefied natural gas hub. Brent crude briefly surged past $119 a barrel on Thursday — its highest level since the early days of the Russia-Ukraine conflict — before retreating to around $114 as markets assessed the scale of the destruction.
The attacks were a direct response to Israeli airstrikes on Iran's South Pars gas field, the world's largest natural gas field and a cornerstone of Iran's domestic energy supply. Following Israel's strike, Iran's Revolutionary Guard Corps warned that Gulf energy sites were 'legitimate targets,' and it followed through swiftly. Beyond Qatar, drone strikes were reported at two oil refineries in Riyadh, Saudi Arabia, as well as at Kuwait Petroleum Corporation facilities, where fires broke out before being extinguished. Abu Dhabi authorities shut down operations at the Habshan gas facility and the Bab oil field after overnight Iranian attacks, calling the strikes a 'dangerous escalation.'
The implications for global markets are staggering. Qatar supplies nearly 20% of global LNG — the fuel that heats homes, powers factories, and generates electricity across Europe, Asia, and beyond. LNG production at Ras Laffan had already been suspended since early March following earlier Iranian drone strikes. The fresh missile damage to the facility could meaningfully extend the timeline for restart. The European TTF benchmark for natural gas surged 24% on Thursday, having already doubled since the war began on February 28. In Asia, the Japan-Korea Marker, the benchmark for LNG pricing in the world's most import-dependent region, jumped sharply, raising alarm in South Korea, Japan, and South Asian nations that rely on Qatar for more than half of their LNG supply.
President Donald Trump responded with an escalatory threat, warning that the United States would 'massively blow up' the South Pars gas field — Iran's largest — if Tehran continued attacking Qatar. Trump also confirmed the U.S. was aware of the South Pars strike before it occurred, though officials have provided conflicting accounts of the extent of that foreknowledge. Defense Secretary Pete Hegseth said the U.S. is 'on track for its objectives' but offered no definitive timeline for the conflict's end.
Analysts at Citigroup warned clients in a note that Brent crude could average $130 per barrel in the second and third quarters if broad attacks on energy infrastructure continue and the Strait of Hormuz remains closed. Rystad Energy's senior vice president Aditya Saraswat said any additional attacks on major regional energy infrastructure could push oil prices up by at least another $10 per barrel from current levels. Wood Mackenzie said the damage to Ras Laffan 'fundamentally alters the global gas market outlook.' Ras Laffan is also a critical source of helium — supplying roughly 25% of global production — a gas essential for semiconductor chip manufacturing, raising supply chain risks for the broader technology sector.
On Wall Street, the S&P 500 fell approximately 1% on Thursday as the fresh energy shock layered onto Wednesday's selloff triggered by the Federal Reserve's inflation warnings. The Dow Jones Industrial Average, which had already closed below its 200-day moving average Wednesday, extended losses. Only the energy sector remained in the green. Investors are now racing to assess which sectors face the greatest damage from an oil price that has doubled since the war began.