Middle East Escalation Shakes Energy Sector as Qatar Halts LNG, Saudi Refinery Shuts

Qatar halted production of liquefied natural gas on Monday and Saudi Arabia shut its biggest domestic oil refinery after a drone strike, as “Israeli” and U.S. strikes and Iranian retaliation triggered precautionary shutdowns of oil and gas facilities across the Middle East.

A wave of attacks on the region stretched into a third day, resulting in the suspension of several oil production.

Oil prices surged 13% to above $82 a barrel, the highest since January 2025, as the conflict ground shipping to a near halt in the Strait of Hormuz, through which a fifth of global oil supply flows.

State oil giant Saudi Aramco’s 2222.SE 550,000 barrels per day (bpd) Ras Tanura refinery, which was shut as a precautionary measure, is part of an energy complex on the kingdom’s Gulf coast which also serves as a critical export terminal for Saudi crude oil.

In Iraqi Kurdistan, which exported 200,000 barrels of oil per day (bpd) via pipeline to Turkey’s Ceyhan port in February, companies including DNO DNO.OL, Gulf Keystone Petroleum GKP.L, Dana Gas DANA.AD and HKN Energy have stopped output at their fields as a precaution, with no damage reported.

In Iran, explosions were heard on Saturday in Kharg Island, which processes 90% of Iran’s crude exports. It was unclear how the facilities were impacted.

Iran, the third largest producer in the Organization of the Petroleum Exporting Countries, pumps about 4.5% of global oil supplies. Iran’s output is about 3.3 million barrels per day of crude, plus 1.3 million bpd of condensate and other liquids.

Qatar’s government said an energy facility belonging to gas giant Qatar Energy was attacked by two Iranian drones on Monday, with authorities still assessing the damage.