Oil jumps 4% as Iranian strike stokes supply worries at Qatar’s key energy facility

Oil prices extended gains as the Middle East remains on the boil, with strikes on energy infrastructure in the region fueling fears of a supply crisis.

Qatar said on Wednesday that Iranian missile strikes had damaged a key liquefied natural gas export facility. The move followed Tehran’s warning about attacking energy facilities in Qatar, Saudi Arabia and the United Arab Emirates after Israel bombed a natural gas refinery in Iran.

Brent is raw May futures were up 4% at $111.80 as of 8:45 pm ET, but US West Texas Intermediate April futures rose more than 3% to $99.47.

Qatar said Iran’s missile strikes had caused “extensive damage” to the Ras Laffan Industrial City, the world’s largest LNG export facility.

Qatar Energy said in a social media post that emergency crews had been dispatched to tackle the fire in Ras Laffan, adding that no casualties had been reported. Later, Qatar’s Ministry of Interior said the fire had been brought under control.

Qatar’s foreign ministry condemned the attack as a “dangerous escalation” and a “clear violation of sovereignty”, warning that it threatens national security and regional stability. It said Qatar had the right to respond under international law.

Saudi Arabia and the United Arab Emirates were on alert after Israel struck an Iranian natural gas refinery.

Qatar had already suspended LNG production on March 2 following Iranian drone strikes on Ras Laffan and Masaid Industrial City. According to Kpler, the country is the world’s second-largest LNG exporter after the US, accounting for about a fifth of global shipments.

Increasing strikes on Middle East energy infrastructure risk exacerbating the supply shock triggered by the Iran war. Tanker movement is largely restricted through the Strait of Hormuz, which handles about 20% of global oil supplies.

— CNBC’s Spencer Kimball contributed to this report.