European countries scrambled to cushion the impact of soaring oil prices on Thursday after tit-for-tat strikes on Gulf energy plants, including the world's largest gas plant in Qatar - the most economically significant escalation of the U.S.-Israeli war on Iran, Reuters reported.
State oil giant QatarEnergy reported "extensive damage" after Iranian missiles hit the Ras Laffan Industrial City, which processes about a fifth of the world's liquefied natural gas, in response to Israel's bombing of Iran's major gas field. Saudi Arabia's back-up oil port on the Red Sea was also attacked.
The seemingly precise strikes were a dramatic demonstration of Iran's continuing ability to exact a heavy price for the U.S.-Israeli campaign and the limits of air defences to protect one of the Gulf region's most valuable and strategic assets.
They also suggested a lack of coordination of strategy and war aims between the two main aggressors almost three weeks into the war.
INTEREST RATES AND ENERGY PRICES WORRY EUROPE
As surging energy prices stoked inflation fears, the likelihood of interest rate hikes increased ahead of Thursday's European Central Bank and Bank of England meetings.
And European Union leaders were also set to try to offset the jump in energy costs at a summit in Brussels, with few easy options available.
Brent futures were up about 7% to more than $114 a barrel by 1026 GMT. Meanwhile European gas prices have leapt by over 60% since the war began on February 28.
Japanese and South Korean stocks fell around 3% while the pan-European (.STOXX), opens new tab index was down 2%.
Iranian aerial attacks since Wednesday have also forced the UAE to shut its Habshan gas facility and set off fires at Kuwait's Mina Al Ahmadi and Abdullah Port oil refineries.
Perhaps just as significantly, Saudi Arabia intercepted a ballistic missile launched towards Yanbu, the port city that serves as the kingdom's only outlet for crude exports since Iran in effect closed the Strait of Hormuz, through which around a fifth of the world's crude oil and liquefied natural gas normally passes.
A drone also fell on the Aramco-Exxon refinery, SAMREF, in Yanbu, the Saudi defence ministry said, adding that damage was being assessed.
Saudi Arabia said it had intercepted and destroyed four ballistic missiles launched toward the capital Riyadh on Wednesday as well as an attempted drone attack on a gas facility in the country's east.
Iran's armed forces command said strikes on Iran's energy infrastructure had led to "a new stage in the war" in which it had attacked energy facilities linked to the United States.
"If strikes (on Iran's energy facilities) happen again, further attacks on your energy infrastructure and that of your allies will not stop until it is completely destroyed," spokesman Ebrahim Zolfaqari said, according to state media
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