Multiple Shocks Hit the Global Natural Gas Supply Chain
2026-3-9
On March 2, QatarEnergy announced the suspension of liquefied natural gas (LNG) production at Ras Laffan and Mesaieed following attacks on its facilities. This sudden incident wiped out approximately 20% of the world¡¯s LNG export capacity from the market overnight. European natural gas prices surged by more than 50% in response, while Brent crude oil prices also jumped by over 8%.
Qatar is a pillar of the global LNG trade. In 2025, QatarEnergy shipped nearly 81 million tons of LNG worldwide, with over 80% going to China, Japan, India, South Korea and other countries. Europe is also a major buyer under long-term contracts. Most of these supplies come from Ras Laffan, the world¡¯s largest LNG export complex. Since 2010, Qatar has dominated the global LNG market due to its massive single-source supply volume. For this reason, the current production disruption represents a historic shock to the global natural gas supply chain. The market has not lost a marginal source, but the very foundation and pillar of LNG trade. This event goes beyond market sentiment and strikes directly at market fundamentals.
Following the news of the production halt, European wholesale natural gas prices rose by more than 50% in a single day, marking the biggest increase since the 2022 energy crisis. Natural gas futures rose across the globe, signaling an imminent fierce scramble for spot cargoes among buyers.
The European natural gas market is particularly vulnerable at present. Entering the seasonal transition period, European natural gas inventories are already below the average level for the same period in previous years, and this shock has further crushed market confidence. Strong purchasing power and relatively low price sensitivity among Asian buyers will intensify bidding for every available spot cargo.
Higher natural gas prices will eventually feed through to electricity costs, industrial production and inflation indicators. For economies reliant on LNG imports such as the UK and continental Europe, a prolonged shutdown would impact contract repricing and winter inventory replenishment strategies.
Beyond Qatar, regional energy supplies are also under multiple attacks. Israel has temporarily shut down its Leviathan gas field on security grounds, halting pipeline gas exports to Egypt and Jordan. Egypt, which imports around 10 billion cubic meters of natural gas from Israel annually, will be forced to increase LNG purchases to fill the gap. Following an attack, Saudi Arabia¡¯s Ras Tanura refinery suspended operations, affecting crude oil and petroleum product supplies. With a capacity of 550,000 barrels per day, the refinery is a key source of diesel for the European market, and its shutdown will further tighten the petroleum product supply chain. All this unfolds against the backdrop of a broader crisis: shipping disruptions in the Strait of Hormuz. Following Iran¡¯s warnings and actual attacks on oil tankers, shipping traffic through the strait has dropped sharply. The waterway carries roughly 20% of the world¡¯s daily oil supplies and is also the main export route for Qatar¡¯s LNG.
Furthermore, on March 3, QatarEnergy announced that, in addition to halting LNG and related product production, it had also suspended some domestic downstream production, including urea, polymers, methanol, aluminum and other products. As a major global exporter of methanol and urea, supply disruptions from Qatar will force Asian buyers to shift to suppliers such as the United States, Trinidad and Tobago, pushing up regional price levels.
Market participants expect other global LNG suppliers to try to fill the gap left by Qatar¡¯s production shutdown. However, U.S. LNG exports are at record highs, with most volumes locked in long-term contracts. Australia is far from major European import routes despite its ample production capacity. Military actions by the United States and Israel against Iran will embed a deeper geopolitical risk premium into LNG pricing than seen during the Russia-Ukraine crisis.
Qatar is a pillar of the global LNG trade. In 2025, QatarEnergy shipped nearly 81 million tons of LNG worldwide, with over 80% going to China, Japan, India, South Korea and other countries. Europe is also a major buyer under long-term contracts. Most of these supplies come from Ras Laffan, the world¡¯s largest LNG export complex. Since 2010, Qatar has dominated the global LNG market due to its massive single-source supply volume. For this reason, the current production disruption represents a historic shock to the global natural gas supply chain. The market has not lost a marginal source, but the very foundation and pillar of LNG trade. This event goes beyond market sentiment and strikes directly at market fundamentals.
Following the news of the production halt, European wholesale natural gas prices rose by more than 50% in a single day, marking the biggest increase since the 2022 energy crisis. Natural gas futures rose across the globe, signaling an imminent fierce scramble for spot cargoes among buyers.
The European natural gas market is particularly vulnerable at present. Entering the seasonal transition period, European natural gas inventories are already below the average level for the same period in previous years, and this shock has further crushed market confidence. Strong purchasing power and relatively low price sensitivity among Asian buyers will intensify bidding for every available spot cargo.
Higher natural gas prices will eventually feed through to electricity costs, industrial production and inflation indicators. For economies reliant on LNG imports such as the UK and continental Europe, a prolonged shutdown would impact contract repricing and winter inventory replenishment strategies.
Beyond Qatar, regional energy supplies are also under multiple attacks. Israel has temporarily shut down its Leviathan gas field on security grounds, halting pipeline gas exports to Egypt and Jordan. Egypt, which imports around 10 billion cubic meters of natural gas from Israel annually, will be forced to increase LNG purchases to fill the gap. Following an attack, Saudi Arabia¡¯s Ras Tanura refinery suspended operations, affecting crude oil and petroleum product supplies. With a capacity of 550,000 barrels per day, the refinery is a key source of diesel for the European market, and its shutdown will further tighten the petroleum product supply chain. All this unfolds against the backdrop of a broader crisis: shipping disruptions in the Strait of Hormuz. Following Iran¡¯s warnings and actual attacks on oil tankers, shipping traffic through the strait has dropped sharply. The waterway carries roughly 20% of the world¡¯s daily oil supplies and is also the main export route for Qatar¡¯s LNG.
Furthermore, on March 3, QatarEnergy announced that, in addition to halting LNG and related product production, it had also suspended some domestic downstream production, including urea, polymers, methanol, aluminum and other products. As a major global exporter of methanol and urea, supply disruptions from Qatar will force Asian buyers to shift to suppliers such as the United States, Trinidad and Tobago, pushing up regional price levels.
Market participants expect other global LNG suppliers to try to fill the gap left by Qatar¡¯s production shutdown. However, U.S. LNG exports are at record highs, with most volumes locked in long-term contracts. Australia is far from major European import routes despite its ample production capacity. Military actions by the United States and Israel against Iran will embed a deeper geopolitical risk premium into LNG pricing than seen during the Russia-Ukraine crisis.