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Major European airlines warned of rising fares if the surge in fuel prices stemming from the Iran conflict persists for months, <\/strong>Reuters reports.<\/strong><\/em><\/p>\n They have urged passengers to book early to avoid extra costs as the industry\u2019s fuel hedging strategies \u2013 which they use to protect themselves from rising energy prices \u2013 start to unwind.<\/p>\n Lufthansa Group Carsten Spohr<\/strong>, speaking alongside other airline leaders in Brussels, said it had added 40 flights to Asia to compensate for disruption to Gulf carriers but demand could be affected by higher fuel charges and fares.<\/p>\n Brent crude is now up 10% so far today at $118.11 a barrel, as the renewed attacks on energy infrastructure in the Middle East alarm investors.<\/p>\n Share<\/p>\n Updated at\u00a007.36 EDT<\/p>\n <\/span><\/span><\/p>\n Key events<\/p>\n <\/span>Show key events only<\/p>\n Please turn on JavaScript to use this feature<\/span><\/p>\n <\/span><\/p>\n Germany\u2019s economy minister, Katherina<\/strong> Reiche<\/strong>, has warned that high energy prices could drive companies out of Europe\u2019s biggest economy, as she expressed concern about the attacks on energy infrastructure in the Middle East.<\/p>\n Share<\/p>\n European stock markets are down across the board this morning.<\/strong><\/p>\n Germany\u2019s DAX<\/strong> has dropped by 2.3%, France\u2019s CAC 40<\/strong> is down 1.7% and Italy\u2019s FTSE<\/strong> Mib<\/strong> and Spain\u2019s IBEX have both lost 2.2%.<\/p>\n The UK\u2019s FTSE<\/strong> 100<\/strong> is little better \u2013 now down 1.9% at 10,109 points (-196 points today)<\/p>\n Raffi Boyadjian<\/strong>, lead market analyst at XM<\/strong>, says:<\/p>\n double quotation markThe brief spout of optimism earlier in the week has dissipated as the conflict in the Middle East shows no sign of easing, while the gatherings of the world\u2019s most important central banks have shunned the spotlight on the fresh inflation threat facing the global economy.<\/p>\n The overriding trend of higher energy prices and tighter monetary policy is making its mark again on the markets, with risk assets crumbling and gold succumbing to the US dollar\u2019s strength, as investors struggle to see an end to the war.<\/p>\n Israel struck Iran\u2019s South Pars gas field on Wednesday, which is the world\u2019s largest natural gas field, triggering an angry retaliation by Tehran. Qatar\u2019s Ras Laffan Industrial City \u2013 the largest LNG plant in the world \u2013 came under attack again, prompting an intervention by the US President.<\/p>\n Posting on his Truth Social platform, Trump attempted to diffuse the situation by distancing the US from Israel\u2019s actions, saying America was unaware of those plans and that \u201cno more attacks will be made by Israel\u201d on South Pars. However, he also warned Tehran that any new strikes on Qatar\u2019s LNG facility would be met by a strong response.<\/p>\n Share<\/p>\n Updated at\u00a006.51 EDT<\/p>\n Ryanair <\/strong>CEO Michael O\u2019Leary<\/strong> has predicted today that European tourists are likely to travel closer to home to cut flight times and avoid flying long-haul over the Middle East.<\/p>\n He was speaking at a news conference in Brussels where airline CEOs called on the EU to postpone its mandates for the use of synthetic sustainable jet fuel (eSAF).<\/p>\n Share<\/p>\n Today\u2019s surge in oil and gas prices could push inflation up to 5%, if prices remain at these levels, predicts Thomas Pugh, <\/strong>chief economist at audit, tax and consulting firm RSM UK.<\/strong><\/p>\n He points out that higher energy prices could cause \u2018second round effects\u2019 (ie, leading to higher wage and price setting), saying:<\/p>\n double quotation mark\u201cWe\u2019ve seen another surge in oil and gas prices this morning as attacks on energy infrastructure in the Middle East escalate the economic risks.<\/p>\n \u201cIf prices of around $117pb for oil and 173p\/therm are maintained, higher energy prices would push to a little above 4% by the end of the year. However, that likely understates the total impact as second-round effects would become more likely and larger if energy prices were still this high into the summer, which could realistically push inflation towards 5%. At that point, interest rate hikes become much more likely.<\/p>\n Share<\/p>\n Updated at\u00a006.34 EDT<\/p>\n Joumanna Nasr Bercetche <\/strong>of Bloomberg <\/strong>flags that China and India are the biggest buyers of Qatar\u2019s LNG:<\/p>\n Share<\/p>\n City traders are betting that the energy crisis will force the Bank of England to raise UK interest rates this year.<\/strong><\/p>\n The money markets are now fully pricing in a quarter-point raise by July, which would take Bank rate back up to 4%.<\/p>\n We\u2019ll get a feeling for the Bank\u2019s view of the situation at noon today, when it is expected to leave interest rates on hold.<\/p>\n Gary Smith,<\/strong> head of EMEA client portfolio manager team, fixed income at Columbia Threadneedle Investments, <\/strong>says:<\/p>\n double quotation markPrior to the conflict in the Middle East markets were primed to expect a March rate cut from the BoE, but this pricing has evaporated \u2013 and we agree that the BoE will likely stay on hold this week.<\/p>\n The Monetary Policy Committee will want to wait for more clarity on the potential inflationary impacts of rising energy costs \u2013 for now this overshadows any domestic political dynamics or economic data.<\/p>\n The Bank will need to judge the energy price shock as \u201cpersistent\u201d in order to justify a monetary policy response and given the current highly uncertain nature of the geopolitical backdrop, it is unlikely that the Bank can determine the nature of the shock at this juncture \u2013 which leaves it in \u201cwait and see\u201d mode.<\/p>\n Share<\/p>\n Major European airlines warned of rising fares if the surge in fuel prices stemming from the Iran conflict persists for months, <\/strong>Reuters reports.<\/strong><\/em><\/p>\n They have urged passengers to book early to avoid extra costs as the industry\u2019s fuel hedging strategies \u2013 which they use to protect themselves from rising energy prices \u2013 start to unwind.<\/p>\n Lufthansa Group Carsten Spohr<\/strong>, speaking alongside other airline leaders in Brussels, said it had added 40 flights to Asia to compensate for disruption to Gulf carriers but demand could be affected by higher fuel charges and fares.<\/p>\n Brent crude is now up 10% so far today at $118.11 a barrel, as the renewed attacks on energy infrastructure in the Middle East alarm investors.<\/p>\n Share<\/p>\n Updated at\u00a007.36 EDT<\/p>\n Greenpeace has responded to the attacks on gas infrastructure in the Persian Gulf, and the resulting spike in energy costs.<\/strong><\/p>\n Maja Darlington, <\/strong>climate campaigner for Greenpeace UK, <\/strong>says:<\/p>\n double quotation mark\u201cLast week we learned that one more big fossil fuel price shock like Ukraine would cost the UK more than the entire bill for getting to net zero.<\/p>\n The latest spike in gas prices makes Trump\u2019s reckless, chaotic war look more and more like that price shock, and it won\u2019t be the last one we experience if we stay hooked to fossil fuels. The UK has the resources to be self-sufficient in energy through renewables. Letting oil and gas stay in the mix means letting foreign wars control our energy bills.\u201d<\/p>\n Share<\/p>\n Yesterday\u2019s missile attacks on Qatar\u2019s Ras Laffan Industrial City have \u201cfundamentally\u201d altered the global gas market outlook, energy consultancy Wood Mackenzie are warning this morning.<\/strong><\/p>\n Wood Mackenzie <\/strong>are warning that initial expectations of a two-month disruption at the site are now likely to be exceeded.<\/p>\n An extended outage risks tightening global supply, raising prices, and delaying capacity growth through 2028, they warn.<\/p>\n Wood Mackenzie <\/strong>point out that Qatari LNG production has been halted since 2 March, which removed around 19% of global LNG supply from the market, or 80m tonnes per annum.<\/p>\n An expansion of its \u201cNorth Field East\u201d site, which would have added 32m tonnes per annum, now faces potential delays, Wood Mackenzie <\/strong>fear, which could \u201creshape supply growth expectations through 2027-2028.\u201d<\/p>\n Before the attacks, Wood Mackenzie had forecast it would take four to six weeks to ramp up Qatari LNG production to full capacity.<\/p>\n Kristy Kramer<\/strong>, head of LNG strategy and market development atWood Mackenzie<\/strong>, warns:<\/p>\n double quotation mark\u201cMarket expectations had been for a short disruption, with a controlled restart restoring supply to pre-conflict levels by mid-2026. That outlook now appears increasingly unlikely.<\/p>\n \u201cA more prolonged outage would further tighten the global supply and keep prices elevated for longer.\u201d<\/p>\n Share<\/p>\n The Brent crude oil price is continuing to climb this morning.<\/strong><\/p>\n It\u2019s now up 8.8% today at $116.85 a barrel, approaching the three-and-a-half-year high of $119.50 set earlier this month.<\/p>\n Share<\/p>\n Shell has confirmed that Wednesday\u2019s attack on Qatar\u2019s Ras Laffan Industrial City caused damage to the Pearl GTL (gas-to-liquids) facility.<\/strong><\/p>\n Shell added the fire was quickly put out, there were no reported injuries and Pearl is now in a \u201csafe state\u201d, after Iran attacked the facility in retaliation for the attack on its South Pars gasfield.<\/p>\n Shell has a 100% interest in Pearl GTL in Qatar, which has capacity to process up to 1.6 billion cubic feet per day of wellhead gas, converting it into 140,000 bpd of gas-to-liquids, Reuters reports<\/em>.<\/p>\n Sky News\u2019s Ed<\/strong> Conway<\/strong> has warned that the attack on Ras<\/strong> Laffan<\/strong> could have serious consequences, potentially for years:<\/p>\n Very, very bad news. Losses across European markets<\/h2>\n
RSM UK: Oil and gas price shock could push UK inflation to 5%<\/h2>\n
Bank of England now expected to raise interest rates this year<\/h2>\n
European airlines warn surging energy prices will mean higher fares<\/h2>\n
Ras Laffan attacks “fundamentally reshape global LNG outlook”<\/h2>\n
Shell says attack on Ras Laffan damaged Pearl GTL facility<\/h2>\n
As I wrote in Material World, Ras Laffan is one of the most important industrial sites not just in the Gulf but in the world. LNG, helium, other products. Massive.
Whatever happens next, serious damage to this site could reverberate for months, maybe years. https:\/\/t.co\/72PGcL66IM<\/p>\n