UK gas price hits three-year high

UK gas prices jumped more than 20% on Thursday morning to around 172 pence per therm, the highest level in three years, after Qatar reported Iranian missile strikes on its Ras Laffan LNG industrial area and Shell confirmed damage at its Pearl GTL plant. Brent crude also surged, rising about 8% to above $115 a barrel, while European equity markets opened sharply lower, with London’s FTSE 100 down roughly 1.7%, according to the Standard.

The immediate market reaction has been less about barrels or cubic metres disappearing and more about the cost of moving energy safely and financing that movement. Ras Laffan is not just another export point: it is the hub for Qatar’s LNG system and a node in Europe’s post-Russia gas strategy. When missiles hit the cluster, insurers, shipping operators and banks reprice the whole chain at once—war-risk premiums, vessel availability, letters of credit, and the willingness of counterparties to transact. That pushes the “risk premium” out of the commodity futures curve and into the plumbing that determines whether cargoes can be loaded, insured, and paid for.

Shell said the Pearl GTL facility—used to convert gas into liquid fuels and feedstocks for products from motor oils to plastics—was damaged but brought to a safe state with no injuries. Even a short outage matters because GTL plants are capital-intensive, operationally delicate, and hard to substitute on short notice. The same logic applies to LNG trains and export terminals: the constraint is not global reserves but which assets can operate without becoming uninsurable.

Political signalling is now moving prices as fast as physical damage. US President Donald Trump said he did not authorise strikes on energy facilities but threatened to “massively blow up” Iran’s South Pars gas field if Iran attacks Qatar’s facilities again, the Standard reports. Traders are being asked to price not only the probability of further attacks but the probability of escalatory decisions that would turn energy infrastructure into explicit targets. That is a different risk model from traditional supply-demand forecasting.

For European central banks, the problem is familiar but harder to manage. Higher gas and oil prices feed directly into headline inflation and indirectly into services and food through transport and fertiliser costs. Yet interest-rate policy does not reopen a damaged LNG hub or lower war-risk insurance. The result is a shock that raises prices while weakening demand—an uncomfortable mix for policymakers already watching slowing wage growth and softening labour markets.

On Thursday, the UK gas market printed its highest price in three years while a single industrial site in Qatar was still being assessed for damage.