Oil jumps 4% as Iranian retaliatory strikes on Qatar’s key energy facility stoke supply worries

Oil prices extended gains as Middle East remains on the boil with strikes on energy infrastructure in the region fanning fears of a supply crunch.

Qatar said Wednesday that Iranian missile strikes had damaged a key liquefied natural gas export facility. The action followed Tehran’s warning about attacking energy facilities in Qatar, Saudi Arabia and the United Arab Emirates after Israel bombed a natural gas processing facility in Iran.

Brent crude May futures were 4% higher at $111.80 as of 8:45 p.m. ET, while U.S. West Texas Intermediate futures for April rose over 3% to $99.47.

Iranian missile strikes inflicted “extensive damage” on Ras Laffan Industrial City, the world’s largest LNG export facility in the world, Qatar said.

Emergency crews were dispatched to tackle fires at Ras Laffan, QatarEnergy said in a social media post, adding there were no reported casualties. Qatar’s Interior Ministry later said the blaze had been brought under control.

Qatar’s foreign Ministry condemned the attack as a “dangerous escalation” and a “flagrant violation of sovereignty,” warning it threatened national security and regional stability. It added that Qatar reserves the right to respond under international law.

Saudi Arabia and the United Arab Emirates were on alert after Israel struck an Iranian natural gas processing facility.

Qatar had already suspended LNG production on March 2 following Iranian drone attacks on Ras Laffan and Mesaieed Industrial City. The country is the world’s second-largest LNG exporter after the U.S., accounting for nearly a fifth of global shipments, according to Kpler.

The escalating strikes on Middle East energy infrastructure risk deepening the supply shock triggered by the Iran war. Tanker movement through the Strait of Hormuz that was handling about 20% of global oil supplies, is largely blocked.

— CNBC’s Spencer Kimball contributed to this report.