One-fifth of global LNG supply has been severely impacted, with European gas prices skyrocketing by 35%, triggering an "energy panic."

Due to the Iranian missile attack causing damage to the world's largest liquefied natural gas (LNG) export facility, concerns about the continued tightness of global supply have surged, leading to a sharp increase in European natural gas prices. Benchmark natural gas futures prices surged 35% on Thursday, more than doubling from levels before the conflict. The market is preparing for sustained attacks on this key LNG hub, which supplies about one-fifth of the global LNG. Qatar Energy Company stated that multiple LNG facilities in its Ras Laffan Industrial City were hit by missile attacks, "causing fires and extensive further damage." While the loading work at the LNG plant has already stopped earlier this month due to the war, the latest attack could potentially keep gas prices in Europe and Asia at elevated levels for a longer period of time. "This could be a disruptive event for the LNG industry, on par with the Nord Stream pipeline attack, or even worse," said Susan Sakmar, visiting assistant professor at the University of Houston Law Center. "This is a sudden supply disruption, with no signs indicating Qatar can quickly restart." The Habshan natural gas facility in Abu Dhabi was also closed due to intercepting attacks and falling debris. U.S. President Donald Trump posted on social media that the U.S. would retaliate if Qatar's LNG facilities were attacked again. The full details regarding the extent of damage and the timeline for repairs are still unclear. While Asian countries purchase most of the Middle Eastern LNG exports, any sustained supply disruption will tighten the global supply-demand balance, thereby raising global gas prices. For Europe, the escalation comes at a tricky time as the region is coming out of winter with depleted natural gas reserves. This means that Europe will have to buy more LNG cargoes to replenish stocks this summer, competing with Asian buyers for already diminished supplies. "Qatar's LNG could theoretically be out for several months, or even years in the worst case scenario," said Arne Rasmussen, chief analyst at a global risk management firm. "For the natural gas market, the crisis won't be over just because the war ends and the Strait of Hormuz reopens." The Ras Laffan plant had already been closed earlier this month due to an Iranian drone attack, marking the first supply disruption in its thirty-year operation. Now, after Israel's attack on the vast South Pars gas field on Wednesday, Iran retaliated, causing "extensive damage" to the complex facility according to Qatar, making the prospect of resuming normal operations even more uncertain. As of the time of writing, the European natural gas benchmarkDutch near-month futures prices have risen by 25.58% to 68.73 per megawatt-hour.