Oil and gas prices surged sharply on Thursday amid rising fears of global supply shortages following attacks on key energy infrastructure in the Middle East.

Qatar announced that Iranian missile strikes had damaged a major liquefied natural gas export facility, after Tehran threatened to target energy infrastructure in Qatar, Saudi Arabia, and the UAE in retaliation for Israeli strikes on a gas processing plant inside Iran.

European gas prices at the Dutch TTF hub – the region’s benchmark – jumped more than 11% to around €61 per megawatt-hour.

In oil markets, Brent crude, the global benchmark, rose more than 1% to $108.78 per barrel after briefly touching $119 earlier in the session before trimming gains. US West Texas Intermediate crude also climbed to around $96.58 per barrel.

US natural gas prices increased by 3.8%, while gasoline futures rose to their highest levels in nearly four years.

QatarEnergy confirmed that the Iranian strikes caused “extensive damage” in Ras Laffan Industrial City, the world’s largest LNG export hub. Emergency teams managed to contain fires with no reported casualties.

The company’s CEO, Saad Al-Kaabi, stated that the attacks disrupted about 17% of the country’s LNG export capacity, adding further strain to global supply.

In an official response, Qatar’s foreign ministry described the attack as a “serious escalation” and a clear violation of sovereignty, warning of its implications for regional security and stability, while affirming its right to respond under international law.

These developments come as the Strait of Hormuz – through which roughly 20% of global oil supply passes – continues to face major disruptions in tanker traffic, heightening the risk of a supply shock.

In parallel, a White House official said the United States is not currently considering restrictions on oil and gas exports, while Vice President J.D. Vance met with oil industry leaders and stressed that reopening the Strait of Hormuz remains a top priority for the administration.

Analysts warned that continued targeting of energy infrastructure could push markets toward a “loss of control” scenario, where the crisis escalates from supply chain disruptions to actual production shortages, potentially triggering sharp volatility and significant price spikes as countries scramble to secure energy supplies.

Gold prices rose on Thursday after hitting their lowest levels in more than a month, supported by a pullback in the US dollar. However, gains remained limited due to the Federal Reserve’s hawkish stance, which reduced expectations for a near-term interest rate cut.

Spot gold climbed 0.8% to $4,856.82 per ounce after touching its lowest level since February 6 earlier in the session, following a sharp 3.7% loss in the previous session. Meanwhile, US gold futures for April delivery fell 0.8% to $4,858.60.

The rebound was supported by a weaker dollar, making the precious metal cheaper for holders of other currencies and helping offset part of its recent losses.

Tim Waterer, Chief Market Analyst at KCM Trade, said that “the slowdown in dollar momentum has allowed gold to recover, albeit modestly,” noting that expectations of US rate cuts had been a key driver of gold’s rally, but rising oil prices have reduced those expectations and weakened upward momentum.

Oil prices surged above $110 per barrel after Iranian attacks targeted energy infrastructure in the Middle East, following strikes on the South Pars gas field. This has intensified inflation concerns, while the closure of the Strait of Hormuz has kept prices elevated, increasing transportation and manufacturing costs.

In a related development, the administration of US President Donald Trump is reportedly considering deploying thousands of troops to reinforce operations in the Middle East, highlighting ongoing geopolitical tensions.

Despite the recent rebound, gold remains down more than 9% since the start of US-Israeli strikes on Iran on February 28, pressured by the strength of the US dollar, which has emerged as a leading safe-haven asset.

Among other precious metals, silver rose 1.5% to $76.52 per ounce, platinum gained 0.6% to $2,035.25, and palladium advanced 1.2% to $1,492.25.

Gold prices fell in European trading on Thursday, extending losses for the second consecutive day and hitting a six-week low, as continued selling in precious metals markets was driven by global inflation concerns amid the escalating war with Iran.

The US dollar maintained its gains against a basket of currencies after the Federal Reserve kept interest rates unchanged for the second consecutive meeting and warned of rising inflation due to higher energy prices.

Price overview

Gold prices today: gold fell 2.75% to $4,687.03 per ounce, the lowest level since February 9, from an opening level of $4,818.34, after recording a high of $4,867.17.

At Wednesday’s close, gold lost 3.75%, marking its fifth loss in the past six sessions, pressured by a stronger dollar following a hawkish Federal Reserve meeting.

US dollar

The dollar index rose 0.1% on Thursday, holding gains for the second consecutive session and reflecting continued strength in the US currency against a basket of major and minor currencies.

Investor focus remains on buying the US dollar as a preferred alternative investment amid the escalation of the Iran war and rising global energy prices, which are fueling inflation concerns.

Federal Reserve

At the conclusion of its second monetary policy meeting this year, and in line with expectations, the Federal Reserve kept interest rates unchanged on Wednesday for the second consecutive meeting.

The Federal Open Market Committee voted 11–1 to maintain the benchmark interest rate at a range of 3.50%–3.75%, the lowest level since September 2022.

Monetary policy statement

The Federal Reserve’s policy statement indicated that the impact of the war with Iran on the US economy remains uncertain, but is expected to push inflation higher in the short term due to the energy price shock.

The Fed said current economic indicators show solid growth in economic activity, while job gains remain relatively moderate, with the unemployment rate stable in recent months, and inflation still relatively elevated.

The central bank reiterated its dual mandate of achieving maximum employment and maintaining inflation at 2% over the long term.

It also noted that uncertainty continues to dominate the economic outlook, particularly regarding the impact of geopolitical developments in the Middle East.

The Federal Open Market Committee will continue monitoring incoming data and stands ready to adjust monetary policy if risks emerge that could hinder its objectives.

Economic projections

The Fed’s quarterly economic projections released on Wednesday included several revisions:

Economic growth: the Fed raised its US growth forecast for this year to 2.4% from 2.3%, for 2027 to 2.3% from 1.9%, and for 2028 to 2.1% from 1.9%.

Headline inflation: the Fed raised its inflation forecast for this year to 2.7% from 2.6% in December projections, for 2027 to 2.2% from 2.1%, while keeping 2028 unchanged at 2.0%.

Core inflation: the Fed raised its core inflation forecast for this year to 2.7% from 2.5%, while leaving 2027 at 2.2% and 2028 at 2.0%.

Target interest rate: the Fed kept its projected rate at 3.50% for this year, and at 3.25% for both 2027 and 2028.

Jerome Powell

Key comments from Federal Reserve Chair Jerome Powell during Wednesday’s press conference:

The implications of Middle East developments remain uncertain.

Elevated inflation largely reflects goods prices, driven in part by tariffs.

Near-term inflation expectations have risen in recent weeks due to Middle East developments.

Higher energy prices will lift headline inflation in the short term.

A series of inflation shocks has slowed recent progress on inflation.

Energy inflation cannot be ignored until goods inflation stabilizes.

Oil price outlook depends on inflation expectations and the broader context of above-target inflation over the past five years.

The median rate path has not changed, but there has been a shift toward fewer rate cuts.

Progress on inflation is expected, but not as strong as previously hoped.

If inflation does not improve, rate cuts will not occur.

Part of the oil shock is reflected in rising inflation expectations and limited progress on inflation.

The ultimate impact of the oil shock will be downward pressure on spending and employment, and upward pressure on inflation.

I am not saying unemployment is more at risk than inflation.

If a new Fed chair is not confirmed by the end of my term, I will serve as acting chair.

I have no intention of leaving the Federal Reserve until the Justice Department investigation is completed.

This energy supply shock is a one-time event.

The possibility of a rate hike has been discussed.

In the short term, data center expansion is slightly lifting inflation and may also raise the neutral rate.

US interest rates

Following the meeting, according to CME’s FedWatch tool, the probability of keeping rates unchanged at the April meeting fell from 99% to 95%, while the probability of a 25 basis point rate hike rose from 1% to 5%.

Gold outlook

Ole Hansen, head of commodity strategy at Saxo Bank, said gold has dropped sharply for the second consecutive day after breaking a key support level below $5,000, amid dollar strength and more hawkish comments from Fed Chair Jerome Powell following the latest FOMC meeting.

Nitesh Shah, commodities strategist at WisdomTree, said: “Geopolitical risks will persist and remain a strong catalyst for gold prices. Despite near-term consolidation, I can easily see gold reaching $6,000 by year-end.”

SPDR Fund

Holdings of SPDR Gold Trust, the world’s largest gold-backed ETF, fell by 2.57 metric tons on Wednesday, marking the fifth consecutive daily decline, bringing total holdings down to 1,066.99 metric tons, the lowest level since January 9.

The euro rose in European trading on Thursday against a basket of global currencies, resuming its recovery from seven-month lows against the US dollar, supported by buying activity at cheaper levels and a weaker US currency following the Federal Reserve meeting.

The European Central Bank is set to conclude later today its second monetary policy meeting of 2026, with expectations that interest rates will remain unchanged for the sixth consecutive meeting. The upcoming statement is expected to provide further signals and clarity بشأن the future path of interest rates this year.

Price overview

Euro exchange rate today: the euro rose 0.35% against the dollar to $1.1491, from the session opening level of $1.1452, after recording a low of $1.1450.

The euro ended Wednesday’s trading down 0.75% against the dollar, marking its first loss in three days, following strong US economic data and a pause in its recovery from a seven-month low of $1.1411.

European Central Bank

The European Central Bank will conclude later today its regular monetary policy meeting, with expectations for rates to remain unchanged, while the policy statement is likely to provide further insight into the trajectory of interest rates throughout the year.

Expectations are currently stable for keeping European interest rates unchanged at 2.15%, the lowest level since October 2022, for the sixth consecutive meeting.

The interest rate decision and monetary policy statement are due at 13:15 GMT, followed by a press conference from ECB President Christine Lagarde at 13:45 GMT.

Euro outlook

According to FX News Today, if the European Central Bank’s comments come in more hawkish than expected, this would reduce the likelihood of interest rate cuts this year and support further gains in the euro against a basket of global currencies.

US dollar

The dollar index fell 0.25% on Thursday, reflecting weakness in the US currency against a basket of global currencies.

On Wednesday, the Federal Reserve kept interest rates unchanged for the second consecutive meeting, while projecting higher inflation, stable unemployment, and only one rate cut in borrowing costs this year.

Federal Reserve Chair Jerome Powell described this outlook as highly uncertain, as policymakers assess the impact of US-Israeli strikes on Iran.