economy
March 2, 2026
A gas shock – not an oil shock – from the Iran war looks more threatening
Europe and Asia will take an economic hit if the supply of Qatari LNG is halted by the closure of the strait of Hormuz
TL;DR
- The price of oil is not currently at 'oil shock' levels, despite recent increases.
- European wholesale gas prices have risen by 50% after QatarEnergy halted LNG production due to Iranian drone strikes.
- The disruption affects 20% of the world's LNG and impacts markets in Europe and Asia, major buyers of the commodity.
- Qatari LNG must pass through the Strait of Hormuz, where shipping has reportedly stopped.
- Analysts warn of potential gas price increases of up to 130% if Hormuz remains disrupted, risking a repeat of Europe's 2022 energy crisis.
- Europe's gas storage levels are low after a cold winter.
- The UK is less reliant on Qatari LNG than in 2022, sourcing most of its LNG from the US.
- Global LNG prices quickly translate to higher consumer bills, and the duration of the Qatari production halt and Hormuz closure are key variables.
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