Energy crisis: Aussie market battered, oil prices surge as Iran and Israel attack major gas hubs

Australian shares dropped 1.5 percent on opening this morning, a four-month low wiping off about $50 billion as oil prices surged as energy infrastructure on all sides in the Middle East came under attack.

Overnight, oil prices surged again, with brent crude, the global oil benchmark, hitting US$110 a barrel.

The oil surge price sent more shockwaves around financial markets at the same time the White House was doing its best to alleviate fears about rising energy prices.

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The global economic fallout remains uncertain as Iran struck Gulf energy sites while Israel took aim at an Iranian gas field. The prospect of an Iran revenge attack for the gasfield bombing will only cause further market carnage.

Gas operations at crucial energy sites in Abu Dhabi have also been temporarily suspended after debris from intercepted missiles fell on the facilities.

What is also uncertain is how much the US backed this latest Israeli strike. The US knew Israel planned to strike Iran's South Pars natural gas fields and oil facilities in Asaluyeh, but it did not take part, the Associated Press reported.

But the Wall Street Journal reported that US President Donald Trump has now made it clear he wants no more strikes on Iranian energy sites, unless Iran threatens oil and trade routes.

Adding to the longtime uncertainty, US Federal Reserve chairman Jerome Powell said that, ultimately, nobody knows what long-term impact the war will have on the US and the global economy.

"The thing I really want to emphasise is that nobody knows," he said, as the US held interest rates.

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Iran keeps up strikes on Gulf countries' oil facilities

Iran has been targeting the energy infrastructure of its Gulf Arab neighbours, as well as military bases, as part of a strategy to drive up oil prices and put pressure on the US and Israel to back down.

QatarEnergy said on X that a missile hit its massive Ras Laffan liquefied natural gas facility, sparking a fire that caused "extensive" damage before it was extinguished.

The company had already halted production there because of Iranian attacks.

Since the war started, a small number of ships have gotten through the Strait of Hormuz, which leads from the Persian Gulf to the open ocean — some Iranian, but also vessels from India, Turkey and elsewhere. Iran insists the waterway is open, just not to the U.S. or its allies.

U.S. President Donald Trump has expressed growing frustration that no allies have offered to help open the strait, posting on social media: "WE DON'T NEED THE HELP OF ANYONE!"

A top British military official, Armed Forces Minister Al Carns, said that any reopening of the strait is a long way off because of threats that include mines, attack boats and drones.

Iraq, which paused operations at its main oil terminal on the Persian Gulf last week, said it had reached a deal with the autonomous northern Iraqi Kurdish administration to begin exporting 250,000 barrels of crude oil daily via pipeline to a port in Turkey.

Saudi Arabia is also bypassing the Strait of Hormuz, sending some of oil by pipeline across the country to be shipped from a Red Sea port.

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Qatar says it 'reserves the right to respond' after Iran attacks a key natural gas site

Ras Laffan Industrial City is the largest liquefied natural gas export facility in the world, according to the website of QatarEnergy, the state-owned oil and gas company.

On X, Qatar's Foreign Ministry condemned the attack and said it marked a dangerous escalation. The ministry wrote that Qatar would not hesitate to respond to attacks on its security and sovereignty.

Why Iran's South Pars field is crucial

The natural gas field under the Gulf is the world's largest. It's shared by Iran and Qatar, and is called South Pars on the Iranian side and the North Field on the Qatari side.

Iran is the fourth-largest consumer of natural gas in the world, and 80 per cent of it comes from South Pars.

Although the field mainly supplies Iran's domestic needs, global oil prices rose on news of the attack due to fears of Iranian retaliation on Gulf energy infrastructure.

Qatar, which has a much smaller population than Iran, has invested billions in developing the field as a source of liquefied natural gas for export.

Iran tried to develop similar LNG exports but was blocked by sanctions over its nuclear program.

- With AP, CNN