Coal and gas prices surge after Iran struck Qatari LNG hub, investors warned selling in shares could continue
Energy prices have surged after Iran struck a Qatari LNG hub as investors are warned the selling in shares could extend as the Middle East conflict grows worse than expected.
Concerns over an extended war in the Middle East sent gas, oil, coal and diesel prices soaring on Tuesday, with Australia’s flagship share market falling 1.3 per cent due to the conflict.
The broad share market selling accelerated after an Iranian drone struck a major Qatari gas export hub and US President Trump warned the war with Iran could last four weeks, or longer, while refusing to rule out a ground invasion of the country.
“History tells us geopolitical shocks tend to produce sharp moves in oil and safe havens that fade relatively quickly if the conflict proves contained,” said Josh Gilbert, a market analyst at eToro.
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By continuing you agree to our Terms and Privacy Policy.“The problem is this situation looks different from last year, when strikes on Iran were followed by limited retaliation and a swift normalisation in markets. The retaliation this time has been far more aggressive and wide-ranging.”
Qatar damage cranks coal, gas prices
On global markets gas and coal prices jumped on reports of Iran targeting Qatari infrastructure on Tuesday.
“The move follows an Iranian drone strike on Qatar’s main liquefied natural gas [LNG] export hub,” said Trading Economics. “The rare shutdown at Qatar’s LNG facilities boosted demand for fuel switching [from gas to coal] in the power sector.
“The facility, which supplies about 20 per cent of global LNG, had never fully halted operations in its 30-year history.
“With many Asian economies reliant on Qatari LNG, Taiwan indicated it may ramp up coal-fired power generation if the disruption persists.”
In 2025 Qatar accounted for about 80 per cent of Asia’s gas supply and 13 per cent of the world’s total.
In response to the attack on Qatar, Benchmark Newcastle Coal prices delivered their biggest one day gain in three years to $US128.70 a tonne, at their highest level since December 2024.
The move pushed ASX miner New Hope up 5.2 per cent, with Whitehaven Coal rising 2.3 per cent to $8.12, and Yancoal Ltd advancing 4.9 per cent to $6.49 a share.
Diesel surges
Prices for London Gas Oil — a type of diesel commonly used in industrial transport vehicles such as tractors — also jumped nearly 6 per cent over the trading session on worries that the drone strike on Qatar’s LNG infrastructure will lead to an extended halt in supply.
Benchmark London Gas Oil prices have now surged more than 20 per cent since the outbreak of the war at the weekend, with motoring group NRMA warning the impact will soon flow through to higher prices for local transport and industrial businesses.
At the closing bell, benchmark Brent Crude oil prices traded flat over the past 24 hours at $US79.10 a barrel, but have still jumped about 9 per cent since the start of the conflict.
West Australian oil and gas giant Woodside posted its fifth session of gains in six to close at $30.48 and has now jumped 12.5 per cent in just over a week, while Australian LNG producer Santos added one per cent to $7.28 to take its weekly advance to nearly 8 per cent.
“In the near term, higher oil prices should raise inflation expectations,” Sonal Desai, chief investment officer at Franklin Templeton Fixed Income, said.
“The US dollar is likely to temporarily strengthen, reflecting a retrenchment in US Federal Reserve rate cut expectations but also the fact that the US economy is much less vulnerable to an oil price shock than the rest of the world.”
Gold gains, tech shares fall
Traditional safe-haven play gold also edged 0.6 per cent higher over Australia’s trading day to $US5358 an ounce to extend its one-month gain to 7.9 per cent.
Ten out of 11 sectors on the local market fell, with energy the only gainer as worries around supply shortages sent prices soaring since the war’s outbreak on Saturday.
The S&P/ASX 200’s 123.6 point fall to 9077 points follows the market hitting a record closing high of 9200.9 points on Monday, with banks and miners doing much of the heavy-lifting over the past six months.
Software stocks also slumped again to push the one-month fall for the downtrodden sector to nearly 15 per cent.
