Oil prices have soared as attacks on energy facilities in the Middle East intensified, raising fears about a major disruption to global supplies.
The price of Brent crude oil rose about 7% on Thursday morning to exceed $114 a barrel.
This means it was approaching the highest level since the conflict escalated in late February.
Prices rose sharply overnight after Qatar said on Thursday that Iranian missile strikes had hit its Ras Laffan liquefied natural gas field, “causing major fires and extensive additional damage.”
This followed reports that Israel launched an attack on the South Pars gas field in Iran.
US President Donald Trump said he “knew nothing” about Israel's attack and did not want to authorize “this level of violence and destruction.”
But he also vowed to “massively blow up the entirety” of Iran’s South Pars gas field if the nation attacks the Qatari facilities again.
Qatar's state-owned energy company, Qatar Energy, had stopped production of liquefied natural gas at its facilities earlier this month due to attacks on its facilities.
European benchmark natural gas prices were also up around 20% on Thursday morning.
Kathleen Brooks, head of research at XTB, said the escalating conflict was “spooking the market” and traders were predicting “heavy losses for stocks” when stock markets open.
“This war appears to be far from over and the energy crisis is moving from a transportation crisis to a supply crisis,” he said.
“If Iran targets energy assets in the region, then the conflict becomes more serious and the repercussions of a long-term shock to energy prices also begin to affect financial markets.”
He added that despite Trump's calls for Israel and Iran to stop attacking energy sites, “it will take a lot of positive sentiment and a flow of news to calm energy prices today.”
