Frankfurt, Germany. European natural gas futures have spiked 42% following the shutdown of a major supplier of seaborne gas amid escalating fighting in the Middle East.

The April contract jumps to 45.46 euros ($53.26) on the ICE commodities exchange after QatarEnergy says it is halting production of liquefied natural gas (LNG) as the regional war intensifies. The state-owned company cites the conflict for its decision.

Qatar is a key gas supplier to Europe, which relies heavily on LNG shipments to replace Russian pipeline gas lost after Moscow’s invasion of Ukraine. Shipping has also been disrupted in the Strait of Hormuz, a critical route for LNG tankers from the Persian Gulf.

Oil prices also rise sharply as tanker traffic through the Strait of Hormuz — a strategic chokepoint at the mouth of the Gulf — faces mounting disruption. About 20% of the world’s oil supply passes through the strait.

US crude climbs 8.4% to $72.63 per barrel, while Brent, the international benchmark, gains 8.5% to $79.13 per barrel.

Data and analytics firm Kpler reports a sharp drop in tanker traffic amid disruptions to satellite navigation systems. The UK Maritime Trade Operations center says several vessels have come under attack near the strait and warns of heightened electronic interference affecting ship-tracking systems.

Oman reports that a bomb-laden drone boat strikes a Marshall Islands-flagged oil tanker in the Gulf of Oman on Monday, killing one mariner. Iran has threatened vessels approaching the strait and is believed to have launched multiple attacks.

Saudi authorities say they intercept Iranian drones targeting the Ras Tanura oil refinery near Dammam. The refinery is shut down as a precaution, according to Saudi state television. Markets are closely watching whether the conflict spreads to other oil-producing nations in the region.

While pipelines bypass the Strait of Hormuz, they lack sufficient capacity to carry the full volume of Gulf exports. Saudi Arabia, Iraq, and the United Arab Emirates depend largely on tankers transiting the strait to reach global markets.

Analysts note that a full closure would also hurt Iran, as its roughly 1.6 million barrels per day of exports pass through the same waterway, much of it destined for China.

The strait is equally vital for LNG shipments. QatarEnergy’s suspension removes one of the world’s top LNG suppliers from the market, adding further pressure to global energy prices.

Higher crude prices could translate into more expensive gasoline in the United States, where fuel costs are a politically sensitive issue ahead of midterm congressional elections. The national average price for regular gasoline rises more than 5 cents last week to $2.98 per gallon, according to AAA.

In Europe, fuel taxes cushion the direct impact of crude price swings, but sustained increases in energy costs could still ripple through the broader economy. A prolonged $15-per-barrel rise could add 0.5 percentage point to consumer prices in Europe, says Holger Schmieding, chief economist at Berenberg bank.

Analysts say Monday’s spike falls within the $5–$10 per barrel “risk premium” typically seen at the onset of conflict. However, prolonged disruption to shipping or direct damage to energy infrastructure could push prices significantly higher.

Torbjorn Soltvedt, principal Middle East analyst at risk intelligence firm Verisk Maplecroft, calls Iran’s reported attack on Ras Tanura a major escalation, signaling that critical Gulf energy infrastructure is within reach.

“If we start to see additional direct attacks against energy infrastructure — not just in Saudi Arabia and Kuwait, but elsewhere in the region — the market will begin pricing in a move toward $90 per barrel and possibly beyond,” he says.

For now, markets remain volatile, with the trajectory of prices hinging on whether disruptions to the Strait of Hormuz prove temporary or evolve into a prolonged blockade that could weigh on global growth and fuel inflation.